Carmakers Raise Prices in April 2025: Impact on Consumers and Dealers

While on the one hand, most carmakers have announced price hikes ranging from 1 per cent to 4 per cent starting April 2025 to counter rising input costs, operational expenses, regulatory changes, and feature enhancements, on the other, with poor off-take at the retail level in the last few months, many dealers are grappling with a significant stock build-up. 

According to the Federation of Automobile Dealears Associations (FADA), as of end-February the inventory at dealerships was around 50 days, on an average, leading to concerns over dealer sustainability and potential financial burdens. 

This situation raises a key question: Will the price increase apply to existing dealership inventory or only to new dispatches from factories?

Some industry observers say with over 50 days of inventory build-up, dealers might have to come out with 'special offers or freebies' to clear up their stockpiles.

Echoing this view, a Mahindra & Mahindra (M&M) dealer says, “Especially in a stressed market like the current one, customers negotiate and often secure good discounts and special offers such as free service priod and so on...,” adding that extra profits are rare and situational.

However, there are counter views too: “Typically, all sales after the cut-off date would reflect the price hike,” explained a Hyundai dealer, suggesting dealers could enjoy higher profit margins on each vehicle sold at the revised price.

Market leader Maruti Suzuki India has confirmed a 4 per cent price increase across its models effective April 8, while Toyota Kirloskar Motor implemented a 1 per cent rise from April 1. Kia India raised prices by 3 per cent at the start of the month, with Tata Motors, Mahindra & Mahindra, and Hyundai Motor India also announcing revisions from April.

FADA emphasises the need for automakers to align wholesale targets with actual retail demand.

Considering the fact that the entry-level demand has been notably weak in recent months, with dealers pointing to delayed conversions and ambitious targets as major hurdles,  and of course the global economic uncertainity triggered by the tariff war and so on, the price increase announced may turnout to be a major impediment for sales in the months to come. Looking ahead, dealers remain cautiously optimistic about April sales, anticipating a boost from promotional schemes, early festival offers, and other special incentives. While FADA is yet to release March retail sales data, the February numbers show that all automotive segments saw a poor growth in comparison with the comparable previous year period.