Major auto makers in the country on Friday reacted to the government’s decision to increase the central excise duty to 10 per cent by saying they will increase car prices — possibly by up to Rs 25,000.
While the country’s largest car maker, Maruti Suzuki India (MSI), said its car will become costly by 2 per cent, Hyundai Motor India said it will result in a price rise of Rs 6,500-25,000 on an average.
“Car prices will go up by about 2 per cent. This is essential to offset the increase in central excise duty announced by the Finance Minister today,” MSI Chairman R.C. Bhargava said.
The Government announced in the budget an increase in the excise duty by 2 per cent to 10 per cent, partially rolling back the cut made earlier.
Meanwhile, a Hyundai Motor spokesperson said: “We will be forced to hike our prices by Rs 6,500 to Rs 25,000.”
Volvo Auto India also said that the increase in excise duty will result in increase of price of its cars. Commenting on the hike in excise rate, General Motors India President Karl Slym said the industry will be forced to pass on the two per cent extra duty to consumers.
“We are disappointed on the increase in duty. The two per cent increase in duty will have to be passed on to the consumers,” he said.
Bajaj Auto Managing Director Rajiv Bajaj, however, said his company is not much bothered about the increase in excise rate, adding that it will have to be eventually passed on to the consumers.
Mahindra & Mahindra praised the Budget’s focus on the rural and farm sector.
“Our focus on products for the rural areas will continue,” M&M President (Automotive) Pawan Goenka said.
Noted auto designer and Chairman of design firm Carnation Auto Jagdeesh Khattar termed the increase as “only rolling back part of the stimulus package.”
“The choice is decrease in prices or easing availability of finance with reasonable rates. I think manufacturers want interest rates to soften and there is easy availability of finances,” Mr. Khattar said.
