Large cars to become cheaper - Excise down by 8%

[rangaraj]

Disclaimer: This is an intent - not become a reality..
Excise on big cars may soon be down to 16%

By IE
Monday October 8, 03:03 AM

Domestic car makers may soon have a big reason to cheer. The current slowdown in the automobile industry triggered by high interest rates against loans may prompt the government to cut excise duty on big cars by 8% and bring it on a par with that on small cars at 16%.

If that happens, the prices of the Honda City, the Suzuki SX4 or the Toyota Corolla may drop significantly.

According to official sources, the government is "seriously considering" the long overdue demand of car makers to reduce excise duties on big cars from 24% to 16%, a sop it had offered only for small cars in the Budget in February.


The sources said the ministry of heavy industries had made a strong case for a cut in excise on big cars to 16%, making it uniform for the entire car industry.

"We expect the finance ministry to take a very serious view of the demand as the car industry, especially the mid-size cars, are in the grip of a slowdown," the sources said.

The idea has been welcomed by the auto industry that said such a step was required to lift its morale. Car makers said they were somehow managing to maintain growth with discounts and some recent launches.

"It is a good move and something that we need desperately. I am sure it would help boost the numbers that have been subdued following the recent increase in interest rates," Atsushi Toyoshima, managing director of Toyota's India subsidiary, told FE.

He said the diverse duty structure in the industry, where pre-defined small cars of a particular engine size and length enjoyed a lower duty than big cars, was an "anomaly" that needed correction.

Asked whether an excise cut would make cars cheaper, Atsushi said, "Definitely." Agreed Jnaneswar Sen, senior general manager of marketing at Honda Siel India. Sen said the step would help push demand and boost the market and sentiments. He said the mid-size car segment had not been faring well and a step like this would help increase sales.

Mod Edit: If this is not a joke, kindly provide link to the news source.

[hellspawn]

well this is a step in the right direction.any idean when this change is going to happen?

[khanak]

Ummmm I think we will end up paying the same amount for our cars because of this

http://www.team-bhp.com/forum/indian...ss-cars-4.html (Dayyum!! Government considering yet another 8% cess on cars)

[dadu]

Also does the source specify and timelines ???, please update.

Originally Posted by rangaraj

Mod Edit: If this is not a joke, kindly provide link to the news source.

[androdev]

ohhh so we pay 24%!!! i didn't know that! i know this is the wrong forum, but do our cities need more big cars!! :-)

[rangaraj]

I saw it on yahoo news this morning.. could not find it now.. here is another pointer:
Newsandmore...: India's Union Budget 2007-2008: A sneak preview
Samachar.com - The bookmark for the Global Indian.The Hindu,News (Financial Express)
Bloomberg (an hour ago) had it as well:
Bloomberg.com: India & Pakistan

DLF, Dr. Reddy's, Automakers, Bharti: India Stock Preview

By Pooja Thakur and Gautam Chakravorthy

Oct. 8 (Bloomberg) -- "..."Automakers: India is considering cutting the excise duty on large cars to 16 percent from 24 percent to boost sales and counter the impact of rising interest rates, the Financial Express reported, citing government officials.

Maruti Suzuki India Ltd., maker of half the cars sold in the country, fell 6.6 rupees, or 0.6 percent, to 1,034.7. Mahindra & Mahindra Ltd., India's biggest maker of sport-utility vehicles, declined 6.8 rupees, or 0.9 percent, to 751.65.

[Tiger]

No. I doubt govt will ever take a decision like this. The purpose of making that excise cut of 8% for small cars is to make India hub for manufacturing small cars.
Reducing excise for big cars wll add more burden on the existing infrastructure & increase fuel consumption.

[Absar]

If this reduction in Excise is after the introduction of the extra 8% for cess, I'm appreciating it! Even if its 8%, that means a saving of 80,000+ for the 10L+ band.

cya
A

[snaronikar]

@Tiger: People who buy the big cars will ot car about the infrastructure and fuel costs. If all the auto manufacturers put pressure on Govt., it is sure happen.

[anandpadhye]

Originally Posted by androdev

ohhh so we pay 24%!!! i didn't know that! i know this is the wrong forum, but do our cities need more big cars!! :-)

We need big cities and big roads and big houses and definately big cars.

Why not?