The 2012-13 Union Budget has left a sore feeling among the Indian auto manufacturer with increase in the standard rate of excise duty by 2 percent. The major car-makers of the country like Maruti Suzuki, Mahindra & Mahindra, Honda Siel Cars India and Tata Motors have decided to increase the prices of their products by up to Rs. 70,000. One of the biggest players of the Indian car market, in immediate response Maruti Suzuki to this latest happening of the Union Budget 2012-13 with an increase in the prices of all its cars. According to Mayank Pareek, the India Managing Executive Officer of Marketing and Sales, Maruti Suzuki will pass on the entire additional excise duty by raising the prices of all its entire product range.
In the Indian car market the small car segment is flooded with the Maruti Suzuki cars. In order to align the prices with the recent changes, it is planned by the company to hike prices of its cars by around two per cent. By the end of this day, the list of revised prices of its products the company is expected to release.
Mahindra & Mahindra the native auto maker will also be hiking up the prices of all its products. The President of Automotve and Farm Eqipment Sector of the Mahindra & Mahindra – Pawan Goenka, mentioned that the hike in the excise duty was pretty much expected looking at the country’s current economic scenario and revenue deficit. He added that the entire load of the increased excise duty will ultimately pass on from the industry to the customers.
Regarding the increase in the price of the vehicles, Mr. Goenka stated that the exact figures will be finalized with time but since recent times have seen an increase in the input costs also, the vehicles can see a rise of 2-3 percent. This increase in the car prices could range between Rs. 6000 to Rs. 30,000.
Mr. Goenka further indicated that the auto industry is expected to see a decline in terms of demand, in the near future. This situation can be controlled only if the interest rates come down favorably.
The Indian auto titan Tata Motors has also increased the prices in proportion to the increase in the excise duty for all its passenger and commercial vehicles.
Jnaneswar Sen, the Senior Vice President of Sales and Marketing division of Honda Siel Cars India also declared that the prices of all the cars that are produced locally will be increased.
In the Union Budget 2012-13, there is increase in the standard excise duty from 10 per cent to 12 per cent which will affect all the cars in the small car segment. In length the cars that are less than 4 meters are considered as smaller cars. Also, for a car to be considered as small the engine capacity for diesel units should be less than 1500cc or 1.2 liter and the engine capacity for the petrol units should be less than 1200 cc or 1.2 liter.Automobile News