Excise duty hike applicable only on dispatches post union budget, old stock cars available at pre-budget prices

The car makers in India have announced that the new increased prices will be applied only on the shipments that reach the dealerships after March 16. With this news, there is still a possibility that a brand new car could be owned at the pre-budget prices. This is also applicable in the case of bookings that were done before the budget. Since it was the middle of the month and not the end when the Union Budget shook the entire auto market, the dealers are likely to have old stock available which should be sold at the old prices. Till old stocks last the customers can demand an all-new car at pre-budget price. The Marketing and Sales Director of Hyundai Motors India, Mr. Arvind Saxena mentioned that the bookings that are currently held by the dealers will be offered at the pre-budget prices if the dealers have the relevant stock. Cars from Hyundai like all other cars available in the Indian car market will see a hike in the prices.

The rise in prices would range from Rs. 5,000 on Eon to Rs. 85,000 on the Santa Fe. Post Union Budget the Mahindra & Mahindra Ltd (M&M) has also increased the prices across models for the new stock. According to the company’s Auto and Tractor Division President Pawan Goenka, the vehicles that the company will be sending after 16th March will have the new price tag and the existing stock that the dealers have is supposed to be sold at the older price tag only. On the subject of vehicles that were booked before the Budget was announced, theAuto financiers have stated that the customers should definitely demand an intervention if at all the vehicles are not made available at the old price tag. The diesel cars have seen the maximum growth in recent times and have been boasting long booking lists. The auto industry has been fighting a demand slowdown since a long time now except for the month of February when the sales took speed in the anticipation of excise hike; the dealers can be persuaded to offer a good deal in this situation.

According the experts of the auto industry, the already affected demand is likely to go down in the face of the increasing service tax and excise duty. In order to intensify the sales the dealers should introduce some promotional schemes.The twin evil spell of service tax and excise duty has hit the sentiments of the auto market which might not be able to get back on the track of recovery very soon. Mr. Saxena of Hyundai India also indicated that the demand is likely to suffer biggest ever blow because of the overall increase in car prices post the union budget. The price increase will furthermore constrict the disposable income for big items like cars. With no change in already high interest rates, the auto industry is under a lot of internal pressure and is expected to register a growth of mere 5-7 percent, he added.