Car buyers are going to get bumpier ride as car prices are going to mark up for the third time this year. According to carmakers, the two hikes were too small to counter the rapid rise in raw material costs.

Prices are expected to increase by up to Rs. 5,000 for mid-segment cars and up to Rs. 12,000 for the bigger saloons and SUVs.

Besides the recent spurt in input costs, the industry is trying to protect its margins to maintain profitability and rationally absorb the recently-imposed specific excise duty of up to Rs 20,000 on all vehicles above 1500 cc.

Honda Siel Cars India has already raised prices of City by Rs. 15,000, Civic by Rs. 20,000 and the newly-launched Accord sedan by Rs. 30,000.

Increasing raw material cost is forcing the automobile industry to continuously review its prices and go for regular hikes.

Car prices were increased in January by 3% followed by another hike in May-June when prices went up by up to 4%.

Now, carmakers say they are forced to go in for another increase as they are paying more for materials like aluminium, nickel, copper, steel, plastic, glass and tyres. The average cost of raw materials, as a percentage of net turnover in a vehicle, has gone up to over 74% from 69% two years ago.

The major increase in input costs is coming from steel, which is up by Rs. 13,000 per tonne, chrome-moly steel is up by Rs. 3,200 per tonne, tyres have gone up by Rs. 2,000 per vehicle, plastics has gone up by Rs. 1,800 per tonne in the second quarter of April-June over the January-March period.

According to industry sources, the rising cost of fuel used in various applications in the automobile sector has also increased energy expenses forcing component makers to ask for higher prices.