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Old 6th January 2015, 11:37   #31
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Default Re: Jan 2015: Reduced excise duty comes to an end. Car prices to climb

Some info:

Booked a Honda City V MT i-vtec in Kolkata and the price breakdown before the excise duty hike was:-

Ex showroom- 927500/-
Honda Assure Normal- 24529/-
5 Years Registration- 52436/-
Handling Charges- 6500/-
Extended Warranty- 7975/-
4 Years RSA- 4600/-
H.P. - 100/-
On road was 10,23,640/- without Zero Dep.

Now after duty hike the price break-up comes like this:-

Ex showroom- 968000/-
Honda Assure Normal- 25523/-
5 Years Registration- 54663/-
Handling Charges- 6500/-
Extended Warranty- 7975/-
4 Years RSA- 4600/-
H.P. - 100/-
On road is now 10,67,361/- without Zero Dep.

That in my math comes to around 43000/- increase in onroad price. There goes my plan of getting better resale value( thus less depreciation) out of the window.
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Old 6th January 2015, 12:01   #32
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Question Re: Jan 2015: Reduced excise duty comes to an end. Car prices to climb

Does the present price hike by car manufacturers also factor in the additional cost which will be incurred for providing the safety features such as ABS and Airbags to comply with the govt requirements whose deadline is Oct 2015 or there is one more round of price hike exclusive for that?

The biggest beneficiary of this car price hike will be the Insurance co who will hike the price of the premiums accordingly. I hope their databases are updated with the new prices city wise.
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Old 6th January 2015, 12:24   #33
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Default Re: Jan 2015: Reduced excise duty comes to an end. Car prices to climb

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Originally Posted by ghodlur View Post
Does the present price hike by car manufacturers also factor in the additional cost which will be incurred for providing the safety features such as ABS and Airbags to comply with the govt requirements whose deadline is Oct 2015 or there is one more round of price hike exclusive for that?
Certainly not. The manufacturers are not offering ABS & airbags as a standard fitment as of now, hence there is no way they can charge the buyers for that. Once these fittings are standard on a car, we will see another price hike for sure. Meanwhile, it will be interesting to see if any manufacturer gears up to produce ABS modules and airbags locally in India. That is a bright business prospect in my opinion.

Also, it is kind of funny how manufacturers like Maruti argue that a hike of 20-25K in price for entry level cars will deter buying plans of middle class and how it will keep the motorcycle owner away from a car (and hence safety) and here comes an increase without this 'concern'

Last edited by saket77 : 6th January 2015 at 12:28.
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Old 6th January 2015, 12:45   #34
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Default Re: Jan 2015: Reduced excise duty comes to an end. Car prices to climb

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Originally Posted by civic-sense View Post
Yeh, but I thought a right wing govt meant lesser taxes. This one seems to be taxing us to hell - first the tax hike on petrol/diesel and now the excise duty on cars. These guys, during the run up, talked about abolishing income tax. But yes, that time they were recruiting.
1. What was happening the states were hiking VAT to neutralise the price cuts. So pocketing the drop in Excise was the saner option. At least it will bsed better than in Saifai Mahotsav!

2. Abolishing Income Tax was an idea of Subramanian Swami and never the official credo!
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Old 6th January 2015, 14:22   #35
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Default Re: Jan 2015: Reduced excise duty comes to an end. Car prices to climb

I sensed this was coming, despite the auto lobby's hectic efforts in trying to get the excise reduction extended at least till the budget. The FM is desperate to meet the deficit target, and his trick of increasing excise on petrol & diesel (instead of passing on the benefit of lower crude prices to consumers) was a sure indication that this concession would also be withdrawn.

I'd like to know whether the crazy ground clearance rule (to differentiate SUVs from other body styles) comes back into effect now?

If the auto lobby were to thoroughly research buyer sentiments, then they would find out that more than the excise duty on vehicles, it's the cost of running them (primarily fuel costs) and the purchasing power of consumers (or disposable income after meeting essential requirements) that influences vehicle sales for both 2-wheelers and 4-wheelers (but not commercial vehicles).

So instead of lobbying for excise concessions, they would do better by lobbying for a transparent, reasonable fuel pricing mechanism and the complete elimination of exchequer-draining subsidies on cooking fuels (along with direct cash transfers for the poor and needy). Private vehicle sales would also go up naturally in a scenario of good economic growth coupled with low inflation levels.

Last edited by RSR : 6th January 2015 at 14:25.
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Old 6th January 2015, 14:41   #36
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Quote:
Originally Posted by Carpainter View Post
Some info:

That in my math comes to around 43000/- increase in onroad price. There goes my plan of getting better resale value( thus less depreciation) out of the window.
I am in the same boat as yours. I had booked a Honda City SV CVT and the net price increase is about 37K now. The only saving grace is that the ex showroom price still remains a shade under 10L or else I would have had to shell out another 50k in taxes.
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Old 6th January 2015, 16:33   #37
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Default Re: Jan 2015: Reduced excise duty comes to an end. Car prices to climb

This roll back in excise duty means a hell lot of money for the Government. I just took the Top 20 cars sold in November in terms of volumes and did a quick math. If the volumes were to remain constant then every month Government will earn minimum INR 280 crores from sale of cars.

Mind you that this is a very pessimistic amount. I have considered only Top 20 cars (they make up for 80% of sales). Also for calculation purpose I have considered the base price of each model so there will be a huge upswing here as well.

Jan 2015: Reduced excise duty comes to an end. Car prices to climb-excise-duty.png

Additional monthly revenue = Difference Amount * Volume (Nov)

Include luxury cars and sale of higher variants and this amount will easily be well over INR 500 crore per month.
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Old 6th January 2015, 22:23   #38
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Default Re: Jan 2015: Reduced excise duty comes to an end. Car prices to climb

Maruti has announced increase in price

Under the revised prices, the popular entry level car Alto 800 will be dearer by Rs 8,500 to Rs 12,700. Before the hike the model was priced between Rs 2.37 lakh and Rs 3.52 lakh (all prices ex-showroom Delhi).

WagonR will see an increase ranging from Rs 12,500 to Rs 15,700 from its current tag of Rs 3.48 lakh to Rs 4.35 lakh.

Swift will cost Rs 15,850 to Rs 25,150 more now from the current price of Rs 4.42 lakh to Rs 6.95 lakh.

Likewise Dzire will see an increase from Rs 17,500 to Rs 26,650 from the current price of Rs 4.85 lakh to Rs 7.32 lakh.

Celerio will see an increase of Rs 13,600 to Rs 17,200 from the existing price tag of Rs 3.76 lakh to Rs 4.78 lakh.

Maruti's latest model Ciaz will cost Rs 22,450 to Rs 31,600 more from the current price of Rs 6.99 lakh to Rs 9.80 lakh, while the price of Ertiga has been hiked by Rs 18,750 to Rs 27,750 from its previous price of Rs 5.8 lakh to Rs 8.49 lakh


GM also announced increase in price

The company has raised the prices of its entry level car Spark in the range of Rs 15,739 to Rs 18,300 and it will now cost between Rs 3.6 lakh and Rs 4.18 lakh (all prices ex- showroom Delhi).

Prices of Beat hatchback have been hiked in the range of 15,739 to Rs 18,300 and it will now be available for Rs 4.2 lakh to Rs 6.28 lakh.

Prices of Sail hatchback have been raised in the range of Rs 20,458 to Rs 36,387. It will now cost between Rs 4.66 lakh to Rs 7.18 lakh.

Sail sedan has become dearer in the range of Rs 22,365 to Rs 35,820. The model is now priced between Rs 5.49 lakh and Rs 8.05 lakh.

Prices of Cruze sedan have been hiked in the range of Rs Rs 46,960 to Rs 55,561. The model would now be available for Rs 14.26 lakh to Rs 16.85 lakh.

The company has raised the prices of Enjoy in the range of Rs 24,901 to Rs 35,319 and it will now cost between Rs 6.10 lakh and Rs 8.62 lakh.

Prices of Tavera have been hiked in the range of Rs 24,799 to Rs 60,982. The model would now be available for Rs 9.25 lakh to Rs 11.29 lakh.
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Old 7th January 2015, 08:54   #39
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Default Re: Jan 2015: Reduced excise duty comes to an end. Car prices to climb

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Originally Posted by zenren View Post
Neither the petrol/diesel nor the excise duty comes under the income tax. Given how evasive most of the population is when it comes to paying the taxes, this would ensure a much more equal footing for tax collected from the people when compared to the conventional way of heavy income tax and minimal taxes elsewhere.

We are seeing the income tax slabs consistently being increased, with 30% slab currently applicable only to those earning over 10 lakhs per annum. When these essential commodities are taxed, the cost would have to be borne by everyone who is dependent on the same. So the per-head tax would come down, since the denominator increases from just the salaried class to the entire population.

Though this makes it impossible to evade tax if you are using these resources, the biggest impact would be felt at the lowest level of the society. This segment never had to pay any income taxes earlier but this additional burden is going to get passed on to them as well. This is precisely how a right-wing ideology works - middle class and upper class would benefit since their tax burden is now shared with the lower class of the society and hence individuals in those segments pay lesser than before.
That piece of economics, I guess, you manufactured on the fly. Economics of the right wing (conservatives, capitalists etc) is towards lesser taxes, lesser govt spending. Lesser consumer taxes means people spend more so that money circulates more bringing growth to the economy.

A true right wing govt would have reduced the heavy taxes on automobiles, leading to people spending more on cars, thereby bringing growth to the industry. Indian auto industry is heavily taxed, that's why cars are more expensive here than countries like the USA.

Last edited by civic-sense : 7th January 2015 at 09:18.
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Old 7th January 2015, 20:09   #40
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Default Re: Jan 2015: Reduced excise duty comes to an end. Car prices to climb

Received a SMS from Renault Kochi wherein it indicates a price hike of Rs 1,68,000 for Duster, Rs 1,53,000 for Scala and Rs 1,43,000 for Pulse on ED increase and price hike. The amount appears to be way too high and could be a novel way to garner bookings bu the dealer.
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Jan 2015: Reduced excise duty comes to an end. Car prices to climb-price-hike.jpg  


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Old 7th January 2015, 20:24   #41
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Default Re: Jan 2015: Reduced excise duty comes to an end. Car prices to climb

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Originally Posted by rajeev k View Post
Received a SMS from Renault Kochi wherein it indicates a price hike of Rs 1,68,000 for Duster, Rs 1,53,000 for Scala and Rs 1,43,000 for Pulse on ED increase and price hike. The amount appears to be way too high and could be a novel way to garner bookings bu the dealer.
Looks like the dealer sent the SMS before Jan'15. If it is so then I guess it was meant to say that if you had bought your car in December then you'd have saved those amount by way of less excise duty and some more discount from the dealer as they give year end discount to clear old stocks.
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Old 7th January 2015, 20:31   #42
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Default Re: Jan 2015: Reduced excise duty comes to an end. Car prices to climb

I got a call from BMW Ahmedabad today and I happened to ask him the price hike on the 3 GT. He mentioned it is not 51.6, a jump of 2 lakhs. Not sure if is the 5% they were already hiking or its a addition of both the excise and the manufacturer hike expeceted.
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Old 8th January 2015, 13:45   #43
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Default Re: Jan 2015: Reduced excise duty comes to an end. Car prices to climb

Guys, I am planning to buy a car this month end is there any point to wait till the budget 2015 expecting a price cut, may be reducing the excise duty. it seems illogical but may be FM wants to earn quick buck before introducing the full budget with discounts?
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Old 8th January 2015, 14:15   #44
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Default Re: Jan 2015: Reduced excise duty comes to an end. Car prices to climb

My colleague was interested in the Swift ZDi and I called my contact at Mandovi, Blore for a quote. The price for this model is up by close to 30k and the OTR price is just about touching 9L.
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Old 8th January 2015, 15:18   #45
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Originally Posted by n_aditya View Post
The price for this model is up by close to 30k and the OTR price is just about touching 9L.
That is quite a shocker!! I wonder how they're going to price the upcoming YRA hatchback. By this strategy, it should easily cross 10L! Will Maruti pull a 'Jazz' in pricing the YRA?

Last edited by GKR9900 : 8th January 2015 at 15:19.
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