Friday, February 26, 2010

Automaker to increase price after excise duty hike

Reacting to Government's decision of increasing excise duty to 10 percent, major automobile manufacturers in the country today said that they will increase the car prices by upto Rs 25,000. Maruti Suzuki which is India's largest car manufacturer said that it will increase the price of its car models by up to 2 percent in India. Maruti currently has around 54% market share in India. While on the other hand Hyundai Motors which is country's largest car exporter said that the excise duty hike will result in a price hike of Rs 6,500-25,000 on an average. R C Bhargava, Chairman of Maruti Suzuki India said that, "Car prices will go up by about two per cent. This is essential to offset the increase in central excise duty announced by the Finance Minister today". Government of India had cut down the excise duty rates to 8 percent to provide a stimulus package to Automobile Industry which was struggling with low sales and credit crunch at that time. But now as Automobile Industry in India has recovered very much and registered a record sales growth in the starting month of this year , the government of India has increased the excise duty again.