Latest Car News in India

Monday, March 19, 2012

By Manoj Kumawat

Maruti Ertiga becomes Budget scapegoat, Ford Ecosport price could remain unaffected

It seems to have been fated for the auto industry in India. If not the tax on diesel way, the misfortune has come the other way round with the increase in the excise duty on auto parts and cars in India. Resultantly, most of the car makers headed by Maruti, Mahindra, Toyota, Ford… all have decided to hike the prices of their cars soon. Where some of the car makers will increase car prices by tomorrow some will be giving a hike in the coming days. Now that the scenario is clear, the road ahead seems to be a trodden path for the car industry in India.
 
The present hike in excise duty on cars as well on auto parts will have a deep impact on the growth of the industry and the prices of all the upcoming cars in India. It is believed that with the new duties, Maruti Ertiga coming in April will be costlier than expected. However, since Ford Ecosport will be powered by 1L Ecoboost engine there is no increase in the expected price.
 
The new prices will be in line with the new duty on cars. Cars which are above 4 meter in length and are powered by over 1.2L petrol or over 1.5L diesel engine will now attract a 24 percent duty. Thus expect Honda City, Volkswagen and the Hyundai Verna to be dearer soon.
 
How the Ertiga will not be able to evade price rise is because of its 4.2 m length. Besides a 1.4L K-14 VVT petrol engine and in diesel it will be 1.3L. Thus either way it is above the tax limit. However, the industry believes that the Ertiga will still be cheaper than other MPVs in India and hence the price rise of over Rs 20,000 to Rs 30,000 will not affect its sales.
 

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