Maruti Suzuki, India's largest car maker, has said it is to raise the prices of its cars from next month to compensate for pressure on its profits from currency fluctuations.
This goes against the recent trend of car companies in India offering discounts to try to stimulate demand.
"There will be a hike in the prices of our products. Quantum will vary depending on models, but it can be up to 20,000 rupees [Dh1,355]," said Mayank Pareek, the chief operating officer for marketing and sales at Maruti Suzuki, according to the Press Trust of India. He cited fluctuations in the rupee for the move.
The car maker sources many of its parts from overseas and pays royalties, priced in yen, to Suzuki.
The rupee has weakened sharply against currencies including the US dollar since last year, asIndia grapples with an economic backdrop of slowing growth and a gaping fiscal deficit.
Car sales have been dampened by weak consumer sentiment combined with high interest rates and rising fuel costs.
Maruti Suzuki's net profit fell 5.4 per cent in the second quarter of the financial year between July and September to 2,275 million rupees after it was forced to shut its Manesar plant because of labour unrest. In a violent protest, Awanish Kumar Dev, a general manager, was burnt to death inside the factory.