Large cars to become cheaper - Excise down by 8%

rangaraj · 8th October 2007, 05:31

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 · 8th October 2007, 07:19

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

khanak · 8th October 2007, 08:12

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

dadu · 8th October 2007, 09:58

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

Quote:

Originally Posted by rangaraj

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

androdev · 8th October 2007, 10:22

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 · 8th October 2007, 10:35

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 · 8th October 2007, 19:27

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 · 9th October 2007, 17:17

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 · 9th October 2007, 17:51

@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 · 9th October 2007, 17:53

Quote:

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?

8th October 2007, 05:31	#1
rangaraj BHPian Join Date: Sep 2005 Location: Bangalore Posts: 570 Thanked: 10 Times	Large cars to become cheaper - Excise down by 8% 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. Last edited by Samurai : 8th October 2007 at 08:15. Reason: provide source
	() Thanks

8th October 2007, 07:19	#2
hellspawn Join Date: Jul 2005 Location: noida Posts: 1,686 Thanked: 7 Times View My Garage Infractions: 0/1 (10)	well this is a step in the right direction.any idean when this change is going to happen?
	() Thanks

8th October 2007, 08:12	#3
khanak Senior - BHPian Join Date: Mar 2005 Location: Mumbai/Toronto Posts: 2,799 Thanked: 268 Times View My Garage	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
	() Thanks

8th October 2007, 10:22	#5
androdev Distinguished - BHPian Join Date: May 2007 Location: bangalore Posts: 3,096 Thanked: 22,284 Times	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!! :-)
	() Thanks

8th October 2007, 10:35	#6
rangaraj BHPian Join Date: Sep 2005 Location: Bangalore Posts: 570 Thanked: 10 Times	sources 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. Last edited by rangaraj : 8th October 2007 at 10:41.
	() Thanks

8th October 2007, 19:27	#7
Tiger BHPian Join Date: Sep 2007 Location: Blr -> Hyderabad Posts: 101 Thanked: 8 Times	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.
	() Thanks

9th October 2007, 17:17	#8
Absar BHPian Join Date: Feb 2007 Location: Madras Posts: 560 Thanked: 10 Times View My Garage	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
	() Thanks

9th October 2007, 17:51	#9
snaronikar Senior - BHPian Join Date: Jun 2007 Location: Bengaluru Posts: 2,845 Thanked: 29 Times View My Garage	@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.
	() Thanks