Stocks Crashing: Can Automakers Still Afford To Keep Prices High?

Even as stock markets reel from heavy losses and investor sentiment remains fragile, automakers are unlikely to hold back on planned vehicle price hikes, industry watchers suggest.

Over the past week, benchmark indices like the Sensex and Nifty have suffered sharp declines, erasing trillions in market capitalisation amid growing global economic uncertainty and looming fears of a full-blown trade war. The Sensex shed 2,886 points, while the Nifty 50 fell by 990 points.

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Despite the market volatility, car manufacturers such as Maruti Suzuki , Tata Motors, and Hyundai remain focused on managing rising input costs and meeting regulatory compliance expenses—factors that, they argue, leave little room for price reductions.

Several automakers have either already announced or are finalising another round of price hikes this quarter. Industry insiders point to elevated commodity prices, increasing operational costs, supply chain disruptions, and stricter emission norms as the key drivers behind these decisions.

“Despite the market correction, demand in the auto sector—especially for SUVs and premium models—remains resilient. We are adjusting prices to protect margins,” said a senior executive at a leading carmaker, speaking on condition of anonymity.

Analysts believe that while sales of high-end vehicles may hold steady, price-sensitive segments such as hatchbacks could take a hit. “With retail inflation inching up and financing costs rising, some buyers may delay their purchases,” said Puneet Gupta, Director at S&P Global Mobility. He added, “Automakers remain confident about long-term demand, driven by a growing preference for personal mobility and a strong pipeline of EV launches.”