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Old 28th February 2013, 21:22   #76
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Default Re: Budget 2013 : SUVs & CBUs more expensive

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...Currently working on an article that will explain the budget in a simple manner.
Noticed GTO has added the report to the first page for this thread. Thought I shall share it incase anyone missed it.

http://www.team-bhp.com/forum/indian...ml#post3053151 (Budget 2013 & The Car Industry)

Thanks a lot GTO & Redline6800 for the compilation. Simply superb, as usual!

Last edited by swiftnfurious : 28th February 2013 at 21:23.
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Old 28th February 2013, 21:24   #77
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Default Re: Budget 2013 & The Car Industry

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Too hard to digest !

I just can not understand this big a hike in CBU prices. It has been ages that we have been anticipating lowering of duties on the imported ones especially the Germans but I dont think its going to be a reality in this life.

A hike of 34% maybe too big for the small ones like the Minis and the Beetles.

Will a CKD be classified as an Indian/ Foreign? Any percentage of localisation which draws the line ?
The hike doesn't affect CKDs as far as I know. This hike doesn't affect mainstream cars like the A4, 5 series, or even the S class but it does affect high performance cars which are not assembled here.

The Minis are CBU, but they will be assembled here in the near future. Going by how well they have sold till now I think the plans for CKD Minis will speed up after seeing the budget.
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Old 28th February 2013, 21:42   #78
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Default Re: Budget 2013 & The Car Industry

If its just the ground clearance Honda may not find it very difficult to lower the new CRV by a mm to get it classified as a non-SUV .

If its the seating capacity , will we soon see an advertisement claiming "Maruti Omni, the cheapest SUV on the Indian Roads"

If the classification is based on engine pre-MJD Palio owners shall soon be the proudest of all.

A ladder on frame criteria may help escape some premium ones from getting classified as SUV.

It shall amuse all, how every manufacturer will dread their vehicle being classified as SUV , which was a forte for selling a product untill today.
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Old 28th February 2013, 21:49   #79
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Default Re: Budget 2013 & The Car Industry

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What I hear is that the total hike on CBUs will come to 34% on the ex showroom price. I don't know the break up but if a car costs 1cr ex showroom now it will cost 1.34 after the budget. Ridiculous.
Based on the formula given by @evo earlier it should be around 14% as compared to the current ex-showroom prices, I think. Simple math ..
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Old 28th February 2013, 21:53   #80
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The law as drafted is pretty clear - any passenger vehicle with more than 1500 cc engine, 4000 mm length and 170 mm ground clearance is an SUV. So the Chevrolet Cruze and BMW x1 are SUVs, but the Mahindra Quanto (<4000 mtr length) and Maruti Ertiga (<1500 cc engine) are not.

While this is counter- intuitive, can you think of an alternate definition? What's the difference between a BMW x1 SUV and a BMW 3 series station wagon? Just ground clearance, isn't it? And with different body shapes (fast backs, coupes, sedans, hatches with large boots), how does the government define an SUV other than by length, engine size and ground clearance.

Should SUVs be taxed more? Clearly not. But why should the 42,000 fools who declare an income of over Rs. 1 crore and contribute over 20% of the personal income tax take in a country of 1.2 billion be the only ones who are hurt by the budget?

However, given the likely protests by Tata Motors and Mahindra, this law could well be amended.

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What I hear is that the total hike on CBUs will come to 34% on the ex showroom price. I don't know the break up but if a car costs 1cr ex showroom now it will cost 1.34 after the budget. Ridiculous.
That is incorrect. The hike for CBU cars would be about 14.5% (2/1.75), and for CBU SUVs would be about 17% (2*1.3/1.75/1.27). By the way, cars with a CIF price of less than USD 40,000 and a engine capacity of less than 3000 cc are excluded from this hike - so duties on a MIni or a Beetle will not change.

Last edited by Hayek : 28th February 2013 at 22:01.
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Old 1st March 2013, 00:37   #81
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Default Re: Budget 2013 & The Car Industry

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Based on the formula given by @evo earlier it should be around 14% as compared to the current ex-showroom prices, I think. Simple math ..
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Originally Posted by Hayek View Post
That is incorrect. The hike for CBU cars would be about 14.5% (2/1.75), and for CBU SUVs would be about 17% (2*1.3/1.75/1.27). By the way, cars with a CIF price of less than USD 40,000 and a engine capacity of less than 3000 cc are excluded from this hike - so duties on a MIni or a Beetle will not change.
Guys what Evo has posted shows the customs duty increasing from 60-75%, which is actually the duty hike for bikes. For CBUs it is from 75%-100%.
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Old 1st March 2013, 02:08   #82
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Default Re: Budget 2013 & The Car Industry

All said and done, though not what an enthusiast would have in mind, I believe that the intentions of the budget are right. The implementation is questionable.

The excise hike for UVs is good move but rather than targeting a certain body type the hike should be w.r.t technical performance. Factors like ARAI fuel efficiency readings and CO2 emissions per km would be more fair and relevant to all players.

Pushing import duty up to 100% feels like overkill to me. Serious players have already understood that they need to go the CKD route and those who do sell CBUs aren't doing quite well enough to setup assembly here. Besides at a CBU price point the country of assembly usually means a lot to the buyer and no brand in that league would compromise on that.

Similarly rather than seeing the an increase of duty on high capacity motorcycles, I'd have been happy to see a lower taxation level for more environmentally friendly bikes. Two-wheelers are an integral part of our transport system and tilting consumer focus to "green" bikes would be neat.

The electric car subsidy, infrastructure push and continuation of JNNURM are welcome efforts. (OT: Can't wait to give the new Reva a go!)
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Old 1st March 2013, 04:51   #83
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My single and everlasting concern still remains. Govt should act as an catalyst in alternate fuel technologies and renewable energies. Import duty of such cars if made locally should be removed. Govt should make a more congenial environment for alternate fuel technologies and should atleast encourage hybrids for a start.
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Old 1st March 2013, 06:56   #84
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Some latest info from the times

"Hiking the excise duty on SUVs and utility vehicles (UVs) from 27% to 30% (except for those sold as taxis), Chidambaram justified the move on the higher congestion they create. "SUVs occupy greater road and parking space and ought to bear a higher tax," Chidambaram said. The government's move was, however, not lauded by the auto industry which fears that a fresh wave of price hikes will further dampen demand. The FM also decided to tax imported cars higher, increasing duty on fully built cars from 75% to 100%. Those hit include Lamborghini and Porsche.

Companies said the duty hikes will be passed on to consumers as they are not in a position to absorb the additional cost. "We are not happy with the move and this will have an impact on our operations as well as profitability," Sandeep Singh, Deputy MD at Toyota Kirloskar Motor, said.

"Singling out SUVs destroys the level playing field. Sad, one has to find to fight harder to succeed in one's own country," Mahindra & Mahindra chairman Anand Mahindra said. The government defined an SUV/utility vehicle as a vehicle that has an engine capacity exceeding 1500 cc; is over 4000 mm in length and has a ground clearance of 170 mm and above. "If a vehicle meets all the three criteria, it will face a higher excise duty," said Vivek Mishra, executive director at PwC India."

So clearly the companies passing the buck on the consumer. Though as some friends had mentioned no company is ready to absorb the burden inspite of fat margins.

The consumer will be driven to smaller engines which in turn would mean better fuel efficiencies.
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Old 1st March 2013, 06:58   #85
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Default Re: Budget 2013 & The Car Industry

Jurnum is nothing more than a scam in the making. For all the multiple thousand crores of public money bent on aquiring buses, look at the state of the buses after six months of buying. Cities like Nasik/Pune have bought thousands of low floor buses, which are rotting in open public parking, because the cities claim they are unable to mantain them..

I mantain this increased taxation is nothing but a congress money making scheme right before the elections, election funding tax if you may....
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Old 1st March 2013, 07:35   #86
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Default Re: Budget 2013 & The Car Industry

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Should SUVs be taxed more? Clearly not. But why should the 42,000 fools who declare an income of over Rs. 1 crore and contribute over 20% of the personal income tax take in a country of 1.2 billion be the only ones who are hurt by the budget?
I remember reading that there are only 1.3% of the people (out of 3.3% who pay tax officially) contributes to 63% of total income tax revenue. So, this clearly shows how much evasion is in place. What wonders me is, there is no attempt to widen the net by PC. Even if it may not be successful, I think there should be some attempt to start the ball rolling. But this govt, did not spent any time to think on this line.

Auto industry is not in good mood. First it was the announcement of the increase of Insurance premiums, and now this extra excise. What's next? Road tax? May be..
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Old 1st March 2013, 07:50   #87
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Default Re: Budget 2013 & The Car Industry

THere goes my dream into a far distance. Was absolutely sure of getting a FZ1 before the budget. With 15% increase i am not sure if i even want to dream about it.

Going back to Youtube and enjoying the videos.
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Old 1st March 2013, 08:36   #88
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Default Re: Budget 2013 & The Car Industry

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THere goes my dream into a far distance. Was absolutely sure of getting a FZ1 before the budget. With 15% increase i am not sure if i even want to dream about it.

Going back to Youtube and enjoying the videos.
My friend , do not get so disheartened. An increase of 15% is not big enough to turn soon to be a reality to dream back again.

If we consider the increase in salaries / incomes , prices of commodities ranging from milk , fruits & vegetables to houses , everything has been rising at the inflation % levels or higher for the last decade. My guesstimate is the % of car price hike maybe the least out of all in all these years.

In these times when we can afford a car, fretting over not being able to buy the one which is class above shall be a little unjust. I wonder if I am sharing my view or consoling myself.
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Old 1st March 2013, 08:52   #89
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The definitions given by the government for tax exemptions on cars are completely idiotic.Either they don't know anything about cars or the officials have some vested interests or both.The reason they give is that they are pollution controlling measures as SUVs are more polluting,then they should give tax exemptions based on CO2 levels rather than capping engine sizes.The small car exemption brought in cars with puny 1.2L engines now there will be sedans and SUVs with engines smaller than 1.5L and low GC.
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Old 1st March 2013, 08:57   #90
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Default Re: Budget 2013 : SUVs & CBUs more expensive

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Guys,

I've received a lot of quotes from industry folk. Seems that the hike in excise duties is for MUVs & SUVs both (but not cars like the Altis or SX4).

Currently working on an article that will explain the budget in a simple manner.
That's a relief. Else those of us who buy cars that happen to have good GC, would have got the stick without any logical linkage.

@tsk, you can't have a formula going by every 1kmpl increase in FE - some slabs maybe way better. Otherwise, you'll have car manufacturers falling backwards to 'rig' the ARAI fuel test score, while in real driving, you actually have lower FE.

Last edited by lancer_rit : 1st March 2013 at 09:00.
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