[anjan_c2007]

Maruti has hiked its car prices by upto Rs 20 K for the second time in 2016. The fallout is that its share has moved northward from Rs 4991=00 to Rs 5037=00 , yesterday. The share value has fallen today 03/08/2016 to Rs 4870=00 for an altogether different reason. The fall is related to the potential car price increases due to the new safety regulations for cars that may bump up small car prices 10% . The share market is much, much more sensitive and sentimental than a sensitive and sentimental child.. Hence, they call it the "Sensitive" index.

According to the Economic Times report (ET newspaper dated 03/08/2016, not the links given below) , the GST when implemented will reduce car prices by 10 to 20 %. The report further states that the Seventh Pay Commission pay packages for Central Government employees will spur demand for cars.

The good monsoon in most parts of the country will boost demand for cars in rural areas.

Hence, the second hike in 2016, announced by MSIL has been done very shrewdly, seeing the timings and the potential demand. And Maruti cars are the most sought after by buyers, countrywide.

And MSIL has been making more profts as compared to any other car maker during the past decades if the financial results are to be perused. So seeing the timing, the tax concessions (GST) can be pocketed right now by increasing prices. The car prices will automatically come down once GST is implemented.

In fact, whenever Central Excise duty has been reduced for cars during the presentation of the annual Central Finance Bill, many car manufacturers have always resorted to price hikes, much prior to the budget exercise.

http://economictimes.indiatimes.com/...w/53493292.cms

http://economictimes.indiatimes.com/...w/53491678.cms

[SDP]

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