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Budget 2012: not so bad!(pg2)

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Excise duty on Cars other than Small cars & with engines less than 2000cc is 24% now instead of 22% previously.

While on SUVs/UVs/Large cars with engines more than 2000cc is now 27% as against 22% previously.

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Budget 2012: Cars will become more expensive tonight

MUMBAI: The finance minister Pranab Mukherjee hit a body blow on the struggling passenger car industry with a 2% increase in excise duty. The increased tax is likely to be passed on to the common man tonight and it will dent an already weakening sentiment.

The government has increased the excise duty on large cars from 22 to 24%.

Budget at ET: Budget 2012 | Union Budget | Live Union Budget Blog | Railway Budget | Budget News | Economic Survey of India

However in what is a major reprieve for the auto industry, the finance minister did not slap any additional tax on the diesel cars.

Car manufacturers, already reeling under the higher interest rates and fuel prices which has risen by almost Rs 14 over the last 12-24 months, saw sales of passenger vehicles grow by a mere 2.95% from April to February this year, after a heady growth of 29% in 2010-12.

The increase in duties will impact demand, say experts.

The excise duty increase will impact two wheeler industry and trucks have off late started showing signs of slowdown.

After starting the day in red, the share price of Maruti Suzuki returned to green. The share price of Maruti Suzuki was up 0.26%, Tata Motors up 0.55% and M&M shot up over 2%, with the finance minister not slapping an additional tax on the diesel cars.

How Automakers responds to Budget2012:

1)Toyota price increment

Etios P 11500

Etios D 13600

Liva P 9500

Liva D 11500

Altis P 39000

Altis D 26500

Innova 35K

Fortuner 80K.

2)Mahindra & Mahindra

Raises prices by 3000 to 35000.

"Given the current economic scenario and the revenue deficit of the country, the hike in excise duty was fully anticipated. Although the industry will not cheer about this, but we have to live with it," Mahindra & Mahindra President (Automotive and Farm Equipment Sector) Pawan Goenka said.

The industry will pass on the entire burden of excise duty to customers, he added.

"The input costs have also gone up in recent times. Considering this, we will raise the prices of our vehicles by 2-3 per cent, translating into an increase of Rs 6,000 to Rs 30,000," Goenka said, adding the exact amount will be fixed in due course of time.

3) Tata motors

will immediately pass on excise duty increase to customers.

4) VW India

VW India's Garg says "difficult to plan our long & mid term strategies in such a volatile market"

5) Mercedes Benz

Mercedes Benz India today said it will hike its product prices by up to Rs 3 lakh expressing disappointment over high duties imposed in the Budget 2012.

6)Honda Siel cars India

Honda Siel Cars India Senior Vice President (Sales and Marketing) Jnaneswar Sen said prices of all locally produced cars will be raised.

(Source: ET & Sirish@Twitter)

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