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In an official announcement made by Fiat India Automobiles, the company declared a price hike of 2 per cent, which will be effective from January 2012. The price hike is applicable on some of Fiat’s successful car models such as Punto and Linea. The price hike is a reaction to the unreasonable and ever increasing input costs. This move did not come as a shock to the market as Fiat is not the only company that announced a price hike. The rising input costs have forced many companies to revisit their pricing strategies and change them considerably.

Spokesperson of Fiat India Automobiles in the announcement said, “We are going to increase prices of Linea and Punto by two percent with effect from January 1. The company has been struggling against the compressing margins that have come its way in the recent times.”

Besides the high priced raw materials, what has caused major disarray to the Indian auto market is the depreciating rupee against the dollar.

Because of the current situation, auto makers such as Nissan Motors, Mahindra & Mahindra Renault, Ford Motors, Hyundai Motors, Toyota Kirloskar and General Motors also did not shy away from making such a move as an attempt to be safe from worse possible market conditions. Many of the mentioned companies will increase the prices by up to 3 per cent from early next year.

The auto makers tried all the possible methods to not pass on the burden to its consumers, but with no success have resorted to price hike as the only option to save themselves from the adversities.