MUMBAI, June 6: It is finally dawning on the automobile industry that the Union Budget presented by Finance Minister Yashwant Sinha will not help the industry to come out of the present crippling recession. Instead, as the cost of production of all the models - from mopeds to HCVs - have shot up (and as always, passed on to the consumers) automobile companies are gearing up for yet another unfavourable year.Thanks to an eight per cent import duty, raw material costs of all the auto companies have gone up substantially. This is exclusive of the sales tax, registration, transportation, insurance, octroi or any other levy or duty which has been increased by the respective state or local governments. Moreover, with the steel as well as tyre producers in the country planning a steep price hike, auto makers will have a tough time increasing their falling sales. In fact, vehicle prices have already started going up. ``We are evaluating the impact of various proposals like duty hikes on components and steelproducts to see how much of it can be passed on to the consumers,'' Maruti Udyog managing director R S S L N Bhaskarudu had said the other day.Following are the segment wise price rise expected in the next few days:TWO-WHEELERS: The Union Budget 1998-99 could have been written by the Chairman of Bajaj Auto, Rahul Bajaj. While the company was constantly losing its market share to competition, the import duty is bound to hurt the LML as its import content in the scooters are as high as 15 per cent. If LML does pass on its cost burden of around Rs 3,500 to the customers, Bajaj Auto will gain a price advantage.High-priced Kinetic Honda will also see its costs going up and the final price to the customers will have to be increased by another Rs 2,500. As the import content in Kinetic's premium model, `Marvel' is very high, its on the road price would cross the Rs 45,000 barrier.In the motorcycle segment, the prices of all the models will go up. Don't be surprised if you have to shell out Rs50,000 for a new bike. Hero Honda, another Bajaj's competitor, with higher import content will have to hike its prices or face a significant cut in its margins. Either way, Bajaj is the gainer while consumers are the losers.PASSENGER CARS: While market leader, Maruti has already announced an `interim' price hike, more are in the offing. Maruti has already hiked the prices of Omni and Gypsy by Rs 6,000 to Rs 11,000. All the foreign car makers - already going though a rough patch - are importing CKD and SKD kits for their Indian customers. With a higher import duty and on the road prices of cars going up, the demand for their products will come down. Prices of Opel, Fiat's Uno, Mercedes, Daewoo's Ceilo and Ford's Escort are set to go up by at least Rs 12-20,000, say analysts.UTILITY VEHICLES: While Mahindra has already increased its prices ranging between Rs 11,200 and 16,775 on its utility vehicles due to 5 per cent increase in excise duty, Telco is likely to increase prices of its`mini-truck' Sumo within the next few days by at least Rs 15,000. Another `also ran' utility vehicle from Telco, `Safari' will witness a hike of Rs 20,000 which is already costing over Rs 8 lakh.HCVs/LCVs: Though the government has spared any hike in diesel prices, higher raw material costs, especially the steel prices, can lead to a price hike. Finally, the last straw. The next time you go out to purchase a new vehicle, take your income tax PAN/GIR number which has been made mandatory by the Finance minister while purchasing a motor vehicle.
