librankur

Expected hike in SUV prices: A Discussion

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Courtesy our FM there has been an increase of 25 per cent in the import duty of CBUs and 3 per cent increase in excise duty of SUVs

The reason as explained is that SUVs occupy greater road and parking space and ought to bear a higher tax.

Its a smart move to garner additional tax as last year there was a 57% jump in the sales of SUVs while there was a 2% fall in car sales.

Now lets see what the expected hike.

Toyota Fortuner

Base Price :21.37L

Expected Hike : 64,100

Mahindra XUV 500

Base Price:11.63L-14.2L

Expected Hike: 34,000

Mahindra Scorpio

Base Price:7.74L

Expected Hike: 23,020

Renault Duster

Base Price:8.59L

Expected Hike: 25,700

Ford Endeavour

Base Price:19.12L-22.27L

Expected Hike: 57,352

Mitsubishi Pajero Sport

Base Price: 22.56L

Expected Hike: 67,680

The budget has been unfavourable for the Automobile industry and has hit it very hard as the industry was hoping for a roll back in the excise duty

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Yes, it's a negative step which will hit the SUV/UV segment which was growing very fast.

There is no official definition of an SUV to separate it from MUVs.

So UVs like Innova, Xylo etc will also be effected (length > 4m and diesel engine > 2000 cc).

Interestingly in compact SUV, Duster Petrol will be hit by this and not diesel one.

As petrol has a 1600 cc engine which makes it to 27% excise duty slab (now 30%).

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Bad times for the Auto Industry really. Infact I read today that any car with 170 mm GC and above is classified as an SUV therefore they are planning to hike prices of cars like the Civic and the Altis as well. The Govt. has lost it. Somehow the auto industry is always made a 'bakra' in the budgets. The times were anyways not good and this will now only get worse

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Its crazy to put a vehicle based just on its ground clearance into the SUV category.

M&M is still up on the stock exchange today based on the 2.4% hike in prices it announced yesterday across the board except for the Quanto.

Hyundai also reported a good 5% increase in sales

In the A2 segment (Eon, Santro, i10 and i20), the company sold 46,387 units, while sales in the A3 segment (Accent and Verna) stood at 7,722 units in February 2013. The company sold 66 units of the sports utility vehicle Santa Fe during the month. Sales of luxury sedan Sonata stood at 20 units, while Elantra witnessed 470 purchases.

Other stock of automobile majors are also up at this moment, are we missing something, if the budget news is that bad how come these stocks are up.May be the impending price hike is taking the stock of these auto majors due north.

Maruti the least affected up almost 4% now others in the green also.

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Vehicle fulfilling these 3 conditions will be covered under SUV :

1. GC of 170 mm and above.

2. 1500 cc above engine capacity

3. Length of more than 4000 mm

All 3 conditions need to be fulfilled.

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Vehicle fulfilling these 3 conditions will be covered under SUV :

1. GC of 170 mm and above.

2. 1500 cc above engine capacity

3. Length of more than 4000 mm

All 3 conditions need to be fulfilled.

I guess rule is: for petrol > 1500 cc and for diesel > 2000 cc?

I didn't knew about the GC rule of 170mm. This being one of the criteria to classify a SUV seems utter rubbish to me.

Guess what then even sedans like SX4 (180mm GC) falls under SUV category?

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oh guys.... any idea then how much price will be increased for these vehicles-

1. BMW 530d M Sport(ckd)

2. BMW X5(cbu)

3. Audi Q7(ckd)

4. Audi Q5(ckd)

5. BMW X3?(ckd)

6. VW Touareg(cbu)

7. Mercedes Benz ML350(cbu)

price hiking of these vehicles can put me in a huge stress!

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Vehicle fulfilling these 3 conditions will be covered under SUV :

1. GC of 170 mm and above.

2. 1500 cc above engine capacity

3. Length of more than 4000 mm

All 3 conditions need to be fulfilled.

Where you got this info?

Actually, FM just said SUV.

When thats the case, the only mini-SUV, the Xylo's price could shoot up drastically and TATA will give up its plan for future MiniSUVs.

The Ecosport will be the next car to be cheated if FM's is not clear with his definition.

If the above condition holds true,

the following cars price will shoot up.

SX4, Etios, Ertiga Petrol, Duster Petrol, Ambassador,...

Edited by creativebala

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Where you got this info?

Actually, FM just said SUV.

SX4, Etios, Ertiga Petrol, Duster Petrol, Ambassador,...

What is said in speech is more of a layman's terms. I am posting here a snapshot of notification issue by GOI in this regard.It will clear all your doubts.IOhzk2X.jpg?1

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So we had been driving SUVs all these years without even knowing about it , our sedans are actually SUVs. :D

Also its no longer about a Diesel , Its more to do with the CC , MM and GC , the term SUV has been loosely used here.

Now that everything is clear ,it calls for an another round of petrol price hike. :huh:

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Mahindra XUV500 loses ground clearance for lower excise

http://timesofindia.indiatimes.com/business/india-business/Mahindra-Mahindra-to-roll-out-cheaper-XUV500-model/articleshow/20962676.cms

Mahindra & Mahindra has reduced the ground clearance of XUV 5oo to avail lower excise duty. The ground clearance, which was 200mm earlier, has been cut to 160mm, giving the company a 3% savings in excise duty on the vehicle.

It is learned that M&M have put a stone guard to lower the GC and thus able to technically evade the SUV rule.

However, I have couple of points on this:

1. In reality, what will be the effect on XUV's performance due to lower GC to 160mm by putting in a stone guard?

2. After buying an XUV, will a customer be able to remove that stone guard to revert GC back to 200mm?

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This stone guard is such a sham.

The stone guard will itself result it in hitting those STONES it is designed to protect the engine from.

The era of low riding ,belly scraping SUVS is here .

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Mahindra XUV500 loses ground clearance for lower excise

http://timesofindia....ow/20962676.cms

Mahindra & Mahindra has reduced the ground clearance of XUV 5oo to avail lower excise duty. The ground clearance, which was 200mm earlier, has been cut to 160mm, giving the company a 3% savings in excise duty on the vehicle.

Wow...what a move by M&M in the Game of MM/GC :) Will a XUV be really a chitah now?

On serious note, i think now Figo has better GC then XUV's 160mm. OMG...where are we heading??? :blink::wacko::rolleyes:

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As learned from article posted our ACI website, M&M has just tricked the way GC is measured, using Indian method instead of using European method.

This made GC down from 200mm to 170mm. But then they went further ahead by adding stone guard to reduce GC by another 10mm.

However, M&M says that in practicality, customers are not going to feel any change.

They also plan to do same thing on other models Scorpio, Bolero etc..

Though this exercise has resulted in savings of around 30k but to me the problem with XUVs faltering sales has been something else.

From a regular 4k sales/month XUV sales has come down to 1300 odd units in month of June.

M&M should focus on quality more than anything else. Those constant niggles and quality issues had a telling effect on it.

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Clarification issued by Central Board of Excise and Customs (CBEC)

"····It is clarified that afore - cited motor vehicles (Maruti SX4, Honda Civic and Corolla Altis), which are known as sedans will attract the excise duty of 27% as applicable to large segment cars"

The clarification was sought by carmakers as several large sedans have technical specifications as that of the SUVs.

Finally some sense prevailed.

Source :Excerpts from an Article in Mail Today

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Sense prevailed, but not before it did some damage.

Wonder what made them wait so long to clarify on this SUV tax applicability on sedans.

People who had bought these sedans with additional 3% duty will be feeling aggrieved now.

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