Following the reduction in excise duty on cars, many automakers in India have slashed the prices of their respective vehicles in India.
This Monday, when the interim Budget 2014-15 was presented in the Lok Sabha, the auto industry was in for a pleasant surprise when Finance Minister P Chidambaram’s proposed to reduce excise duty on small cars and motorcycles from the earlier 12 per cent to 8 per cent. Furthermore, the excise duty on mid-size sedans have been reduced to 20 per cent from earlier 24 per cent and that of large cars has been reduced to 24 per cent from earlier 27 per cent. Excise duty on SUVs has also been slashed to 24 per cent from the earlier 30 per cent. As a result, a number of automakers have willingly, slashed the prices of their respective cars in order to pass on the benefit of the excise duty reduction to the customers.
The surprise move by the government coupled with the decision of automakers to cut car prices will indeed, lift the fortunes of the auto industry after more than two years of gloom and dismal sales. We take a look at all the brands and their respective car models whose prices have been revised post the excise duty cut.
The biggest relief comes from India’s largest automaker Maruti Suzuki who have dropped the prices in the range of Rs 8,197 for its entry-level Maruti 800 model and going up to Rs 30,984 for its SX4 sedan. The new Maruti Suzuki Celerio that is reportedly, gathering close to 1,000 bookings per day since the time the car was introduced earlier this month will now cost Rs 13,615 less, making the starting price of the hatchback Rs 3.76 lakh (ex-showroom, New Delhi).
South Korean automaker Hyundai has opted for bigger price cuts on its cars with benefits ranging between Rs 10,000 and Rs 1,35,300 across all of its models on sale in the country. Hyundai’s entry-level offering, the Eon will now be cheaper by Rs 10,000 to cost Rs 3.10 lakh, while the top-end variant of the premium Santa Fe SUV has now become cheaper by about Rs 1.35 lakh. “The reduction in excise duty will substantially reduce prices, making cars more affordable. Hyundai Motor has extended the excise benefits to customers with immediate effect and will also support its dealerships suitably on the price compensation,” said Mr Rakesh Srivastava, senior vice president of marketing & sales, Hyundai Motor India.
German automaker Volkswagen that registered a 15 per cent drop in sales has cut prices by Rs 18,000 to Rs 31,000 for its Polo hatchback, depending upon the variant. The Vento sedan will now be cheaper by Rs 14,500 to Rs 27,000, while prices of the executive sedan Jetta has been slashed by Rs 38,000 to Rs 51,000 with immediate effect. “We have passed on the entire excise benefit to our customers, and hope this move will help improve the market sentiment in the automotive industry,” said Arvind Saxena, managing director of Volkswagen Passenger Cars India.
Mahindra & Mahindra
Utility vehicle maker Mahindra & Mahindra Ltd have announced a reduction in prices of its passenger vehicle portfolio ranging between Rs 13,000 and Rs 49,000, depending upon the model. Mahindra South Korean subsidiary, Ssangyong has also slashed the prices of its premium SUV, Ssangyong Rexton by up to Rs 92,000.
Japanese carmaker Honda Cars India have reduced the prices of their car in the range of Rs 14,650 to Rs 44,741. The company’s best-selling Honda Amaze sedan will now cost Rs 20,000 less bringing its starting price to Rs 4.99 lakh for the base petrol variant and Rs 5.97 lakh for the base diesel variant. Honda’s flagship Brio hatchback will now retail between Rs 3.99 lakh and Rs 5.99 lakh.
Nissan Motor India has slashed the prices of its vehicles by up to 6 per cent effective from February 18, 2014 across its entire model range. “The price reduction by Nissan is in the range of 4 to 6 per cent and will apply to Micra Active, Micra, Sunny, Evalia, Terrano and Teana,” Nissan Motor India said in a press release issued today. Nissan Motor India president Kenichiro Yomura said, “We at Nissan are happy to pass 100 per cent of the tax benefits to our customers.”
Fiat said its cars would now be Rs 8,000-Rs 12,000 cheaper, depending on the variants. The company sells the Punto and Linea models in the country.
On the luxury front, Mercedes-Benz India have slashed the prices of its C-class Avantgarde edition to now cost R39.35 lakh, down from R39.90 lakh, while the GL-class SUV will now cost Rs 2 lakh less.
The reduction in car prices is likely to resurrect the auto market that had been knocked out by poor sales, which were triggered by high fuel costs, rise in input costs and the high interest rates that compelled the customers to postpone their car purchases. Car sales fell 10 per cent to 18.07 lakh in 2013 – arguably one of the worst years for the Indian automotive industry. The aforementioned proposal however, has brightened the prospects of the industry.