Carmakers are considering a price hike in the near future as a result of an escalation in steel prices.

Toyota Kirloskar Motor, the subsidiary of Japan's Toyota Motor, said on Tuesday that it would increase prices of its multi-purpose vehicle Qualis next month and attributed the decision purely to growing steel prices.

Market leaders Maruti and Hyundai were also expected to announce new prices soon, said industry sources.

"We have to take into consideration that steel prices are increasing. We have decided to increase the prices of the existing variants of the Qualis next month," Satoshi Aoki, director, marketing, Toyota Kirloskar Motor, said at a press briefing in New Delhi.

He clarified that the price increase will be restricted to the Qualis for the time being. There is no immediate decision on the prices of Corolla and Camry.

A Hyundai spokesperson said the company was following the rise in steel prices. "We are studying the impact of the increase in steel prices. We are not in a position to respond to this immediately."

The company had increased the prices of Santro in the first week of May this year owing to an escalation in the cost of inputs.

Hyundai launched a new model, 'Xing', subsequently, but kept the prices unchanged. B V R Subbu, the company president, has indicated that the "introductory" prices will be increased shortly.

The country's largest carmaker Maruti Udyog is also considering an increase in prices. A spokesperson for the company said, "So far, we have absorbed the increase in input costs. But if steel prices continue to maintain an upward trend, we will be forced to increase the prices of our cars."

Maruti has been talking of an increase in prices since April this year. But the company which went for an initial public offer this month to divest government shareholding has not been able to take a decision.

Car prices were reduced by 5-8 per cent in March after the government cut excise duty from 32 per cent to 24 per cent (25 per cent to be specific, since an additional 1 per cent calamity contingency cess was also imposed).

The decrease in prices helped carmakers post significant growth in volumes in the past three months despite a 10-day trucker's strike. Carmakers say they expect a volume growth of over 10 per cent this year.

Upwardly mobile

• Toyota Kirloskar Motor today said it would increase prices of its multi-purpose vehicle Qualis next month.
• Maruti and Hyundai were also expected to announce new prices soon.
• Car prices were reduced by 5-8 per cent in March after the government cut excise duty from 32 per cent to 24 per cent.