Get ready for expensive drives
The prices of cars are set to rise from Saturday as the government increased the excise duty on small cars from 10% to 12%, large cars from 22% to 24% and as much as 27% on cars such as Honda Civic and Mahindra Scorpio that have engines bigger than 1500cc.autos Updated: Mar 17, 2012 00:25 IST
The prices of cars are set to rise from Saturday as the government increased the excise duty on small cars from 10% to 12%, large cars from 22% to 24% and as much as 27% on cars such as Honda Civic and Mahindra Scorpio that have engines bigger than 1500cc.
The increase would range between R5,000 for an entry level Hyundai Eon to Rs 39,000 for the Corolla and around R3 lakh for a Mercedes E class.
“The Budget is negative for us overall,” said Arvind Saxena, director (marketing and sales), Hyundai Motor India Ltd.”
There is also a sense of relief as the expected additional tax on diesel vehicles was not imposed.
“I am happy and applaud the government for not punishing one industry over another,” said Michael Boneham, president, Ford India. “That would have been very regressive.”
“The increase in excise and customs duty on large cars in this Budget is very surprising,” said Michael Perschke, head, Audi India. “This increase comes at a time when the automotive industry was finding favor with customers looking for better and efficient cars. We may now need to re-evaluate our pricing strategy in India.”
Even imported luxurious cars such as Rolls Royce, Bentley and Ferrari have not been spared. The duty on such cars that cost over R20 lakh with engines bigger than 3000cc for petrol and 2500cc for diesel, has been increased from 60% to 75%.
While domestic manufacturers are happy as this would discourage import of cars, it has sent confusing signals as India is already in negotiations with Europe over reducing import duties for cars under the bilateral free trade agreement.
“The kind of treatment meted out to large cars that are safer, more efficient and environment friendly is disappointing,” said Suhas Kadlaskar, director, corporate affairs, Mercedes Benz. India.