Both Indian and multinational car manufacturers have confirmed a price hike of up to 3 % with effect from 1st January 2012. As usual, the month of December saw car makers selling their products at huge rebates in order to clear-off the stock. However, this time, the discounts offered by car companies were higher as most passenger cars could not attract sufficient volume of buyers due to high fuel prices and unaffordable interest rates on car loan.

Mahindra & Mahindra has announced an increase in the price of its vehicles by up to 3 %. The company has also decided to raise the cost of its recently launched sports utility vehicle XUV500 to Rs. 30,000-55,000.

HMIL is set to increase the prices of its cars by 1.5-2 % whereas Toyota has decided to hike prices by 1.5-3 %. Ford India will also increase the cost of its vehicles by 2-3 %.

With the start of New Year, buyers will have to pay more for purchasing vehicles, at least during the initial phases of 2012. However, car companies may bring some relief to the customers as a wide range of vehicles would be made available to them.