Wednesday, March 06, 2013
By Anil Jangid
SIAM seeks FM to withdraw hike in excise duty on SUVs
Car industry body SIAM has decided to ask the Finance Minister of India Palaniappan Chidambaram to roll back the proposed excise duty on SUVs. The hike in the import duty on completely built cars has been increased and thus luxury cars that are imported will see a steep price rise while bigger SUVs with high ground clearance will also invite more excise duty. As per an estimate the rise in price of SUVs such as Mahindra XUV 500 or Tata Safari Storme could go up by up to Rs 60,000.
Meanwhile, the petrol price also saw an increase of Rs 1.40 per litre which is again determining for car sales in India. It is the small car segment that will see a dip as most of the cars in this segment are petrol driven and it will be hard for the common man who is the potential buyer to either buy it or sustain it in the long run.
According to source, it seems that the budget is solely to deter SUV sales in the country and specially it is this segment that has seen some movement in the recent past. Other segments including the small car segment as well as the sedan is moving at a very slow pace. It is the MUV segment and the SUV segment that is keeping some numbers on the sales chart. Also an increase in the duty on passenger use SUVs and not on all vehicles is again discrimination, said sources. In all, the budget, the fuel hike, high interest rates, inflation, falling rupee value and lot many other factors indicate a grim time for car makers ahead and it seems that SIAM is heading to avert this phase.
SIAM has expressed its concern that for cars in the same price category, some have to pay higher taxes while others will still enjoy the concession. Meanwhile the Union Budget has also proposed several rate cuts for electric and hybrid vehicle leading to better pricing of electric and hybrid cars in India. The only upcoming electric car is Mahindra E2O and after the budget it is expected that it will be priced very well in the Indian market.