Skoda is planning to hike prices across its model range within the next two to three weeks. According to company sources, the price hike will be in the region of 1 to 2 percent depending on the model. We estimate Fabia prices are likely to rise by around Rs. 10,000 to 15,000 whilst the top-end Superb could see a hike of as much as Rs. 30,000. The weak rupee which has depreciated by 26.75 percent in the past year is forcing the company to raise prices. The relatively low level of localisation on models like Fabia is exacerbating the exchange rate problem and putting huge pressure on Skoda’s bottom line.
However, Skoda is not alone. Most of the multi-national auto companies are suffering because of the depreciating rupee and Skoda’s price hike could prompt other manufacturers to follow suit.