Carmakers: Withdrawal of excise sop would negatively impact sales

Carmakers: Withdrawal of excise sop would negatively impact sales

FPJ BureauUpdated: Saturday, June 01, 2019, 05:13 AM IST
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New Delhi : Automakers expressed their disappointment over the government’s decision to not extend the excise duty benefits offered tothem beyond Dec 31, and said they will pass on the rise in cost to buyerswith immediate effect.

Excise duty on small cars, scooters, motorcycles and commercial vehicles was reduced to 8 per cent from 12 per cent previously. For SUVs, it was cut to 24 per cent from 30 per cent; for mid-sized cars, to 20 per cent from 24 per cent and to 24 per cent for large cars, from 27 per cent. In the consumer durables sector the excise was reduced to 10 per cent from 12 per cent.

While firms are still awaiting a formal communication and working out on the subsequent details of price hike, Honda Cars India Senior Vice-President (Marketing and Sales) Jnaneswar Sen told PTI: “Prices will go up as a result of this decision. This move will also impact demand in the short- term.”

Expressing similar views, Maruti Suzuki India Chairman R C Bhargava said: “It is a government decision. We don’t have any option but to accept it. It will have an impact on sales. I believe sales will slow down in the short term due to this development.” Hyundai Motor India Senior Vice-President (Sales and Marketing) Rakesh Srivastava said the development would ‘adversely impact’ automobile industry.

“With the increase in excise duty the prices will go up effective January 1. As the increase is sizable it will adversely impact demand,” he said.

He, however, expressed the hope that in the upcoming budget the government would look at rationalisation of taxes to support the manufacturing industry.

 General Motors India, Vice President P Balendran termed it as a “retrograde step”. “Roll-back of the excise duty sops for the automobile sector will be a retrograde step. Even though the market had started to pick up slightly because of new entries, any roll-back will be a big jolt for consumers as it will push up ownership costs,” he said.

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