Cars, SUVS, Two-Wheelers to Cost Less Post Excise Duty Cut
Prices of automobiles, including cars, sports utility vehicles and two-wheelers, are set to come down with Finance Minister P Chidambaram today announcing a reduction in excise duty in the interim Budget. “To give relief to the automobile industry, which is registering unprecedented negative growth, I propose to reduce excise duty,” Chidambaram said. Excise duty for small cars, scooters, motorcycles and commercial vehicles will come down to 8 per cent from 12 per cent earlier. SUVs will attract excise duty of 24 per cent as against 30 per cent earlier. Excise duty on large cars will now be 24 per cent compared with 27 per cent earlier, while the duty on mid-sized cars will go down to 20 per cent from 24 per cent previously. The excise duty cut will be applicable up to June 20, 2014. Society of Indian Au tomob i le Manufacturers (SIAM) President Vikram Kirloskar said the reduction in excise duty would lower prices and make vehicles more affordable, which would improve consumer sentiment and hopefully revive the demand for vehicles. “This could hopefully herald a revival of the manufacturing sector in the days to come,” Kirloskar added. Honda Cars India Senior Vice President - Marketing and Sales, Jnaneswar Sen, termed the interim budget positive for the auto sector. “These reductions will propel demand in the coming months and anchor support for a better first quarter. It will give a muchneeded boost to the industry as it looks to recover from the ongoing slowdown,” he added. Nissan Motor India Chief Financial Officer Sunil Rekhi said lower excise duty would cut the acquisition price. Making vehicles more affordable should improve consumer sentiment and hopefully revive growth for vehicles, he added. Renault India Country Chief Executive Officer and Managing Director Sumit Sawhney said the government’s move would provide a much-awaited impetus to the sector. “We welcome this move and look forward to the step being part of the government’s long-term strategy for sustainable growth for the industry,” he said. Annual car sales in India declined for the first time in 11 years in 2013, posting a 9.59 per cent dip, as the auto industry reeled under a prolonged demand slump due to the economic slowdown. According to the Society of Indian Automobile Manufacturers, domestic car sales last year fell to 18,07,011 units from 19,98,703 units in the previous year. The slump in sales continued in January as car sales fell for the fourth straight month with a decline of 7.59 per cent to 1,60,289 units from a year earlier. Taking the cue, German car makers Audi and Mercedes-Benz have cut prices by up to Rs 3.82 lakh. Audi cut the price of its premium sports utility vehicle ( SUV) Q7 by Rs 3.82 lakh to Rs 78.28 lakh from the earlier price of Rs 82.11 lakh. The base version of Q7 will retail at Rs 58.34 lakh, a cut of Rs 2.84 lakh. The price of SUV Q5 was lowered by Rs 2.22 lakh to Rs 45.72 lakh. The German firm cut the price of the base version of its A4 sedan by Rs 72,000 to Rs 29.85 lakh. The higher variant will be cheaper by Rs 90,000 at Rs 37.04 lakh. Rival Mercedes-Benz cut the price of its SUV GL-Class by Rs 2 lakh to Rs 72 lakh. The C-Class (C 220 Ava grand edition) would come down to Rs 39.35 lakh from Rs 39.9 lakh.