Ford India, General Motors, Hyundai Motors India, Mahindra & Mahindra, Maruti Udyog, Skoda Auto and Tata Motors have all told their dealers a hike in car prices is imminent as margins are tightening under pressure from rising costs.

Car prices are expected to rise from INR5,000 (€100) to INR20,000 (€400) in January 2005 as vehicle manufacturers can no longer bear the brunt of rising prices for steel, plastic and energy caused by higher crude oil prices.

There is also pressure on prices of imported parts as the dollar weakens in relation to the Indian rupee.

However, intense competition at retail level will offset car maker price hikes to some degree thanks to incentives, and insurance and accessories discounts.

Deepesh Rathore / Tilak Swarup

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