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|1st March 2010, 09:23||#31|
Senior - BHPian
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|1st March 2010, 12:53||#32|
Senior - BHPian
Join Date: Jan 2010
Thanked: 1,575 Times
In my opinion, the manufacturers are not only passing the cost of BS4 norms but also the increase in excise duty for all the models, irrespective of the fact whether the car is big or small car.
I have the following observations to make in this case:
1. Small hike in all the cases can be attributed to BS4 modications;
2. Remaining, which the manufacturers claim is due to increase in Excise Duty (marginal increase in duty by 2%), could be bogus to a great extent. Reasons are as follows:
2.a. Any manufacturer of goods can claim credit of duty paid on the goods used as input in manufacturing. Thus, in case the inputs become costly because excise duty, the incremental costs (read duty paid) can be claimed credit of. Hence, there should not be any increase in cost of output if it relates to increase in duty.
2.b. Manufacturer have increased cost by Rs.15,000 (average). Does this means that the overall costs of BS4 modification is this high, or they have just sought increase in profits by a bigger ratio over the increase in costs, at the cost of ignorant & innocent buyers, who are forced to pay for the car they have decided to purchase. Consider the following equation:
Rs.15,000 / 2% = Rs.7,50,000.
Does the average cost of cars sold by Indian manufacturers is this high when most of the activity happens in the small cars segment & this is the higher limit of sale price of small cars sold in India (Jazz & i20)?
In my opinion, they are cheating & have formed a cartel as they want their revenues to increase to the levels of best car manufacurers, without having spent any effort or finances to reach the level where the leaders are.
2.c. Also note that duty is levied on the cost of output not the sale price of the goods (except in few cases, MRP driven duty regime). I wonder whether the cost of manufacturing a Swift (including D-zire) & i10 (both garner the maximum sales in India) comes this high (Rs.750K, refer above computation).
Please ponder over the issues raised & then form the opinion whether the increases are justified or not.
I understand that our government is sleeping, or counting the incremental taxes earned on each sales, but, at least we can create an impact minor or major, whatever?
If the Eeco can be sold for a price which is approx. Rs125K cheaper than outgiong Swift engine, after the company having spent some time in mofications in the tools & dyes, the overall size of Eeco is bigger than Swift (inputs' cost is higher), how come it is being profitably sold?
In the light of, the above please consider the profit made by Maruti on Maruti on avery G-series Swift made, as Eeco would not be sold for a loss.
After all India started as the Gandhian + Nehruvian policy of Socialism. But, the successive governments are falling in the hands of business houses.
God save (poor) Indian voting masses.
|11th March 2010, 17:52||#33|
Join Date: Jan 2010
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Euro-IV norms may hit auto firms
From April 1, all vehicles will have to comply with Euro IV emission norms across 13 major cities, adding to costs and setting the stage for another round of price hikes.
Hike in excise duty, Euro-IV norms may hit auto firms- Automobiles-Auto-News By Industry-News-The Economic Times
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