Auto India, Car India

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The auto companies doesn’t see the extra specific duty impose on the big cars impacting sales. However, company representatives believe sales may be hit in the case of MUVs and SUVs that also serve as transportation in rural areas.

On Friday, the Center imposed the specific duty of Rs 15K on cars with the engine size of 1500 to 1999cc and Rs 20K on the cars above 2000cc. This was on the top of the existing 24% ad excise duty. The vehicles such as Hyundai Verna and Ford Fusion and those in a super luxury segment including a S-Class of Mercedes and a 7-series prototypes of BMW.

While each industry is yet to take decision on rising costs after the announcement of Finance Minister, they are likely to pass the additional impost to customers in coming days.

Industries like Honda say that the impact of the Rs 15K – 20K excise/se may not be a lot. But when observed in tandem with rising interest rates & fuel cost hike, there could be the cumulative effect on the customer sentiment.

There is going to be an overall perception that buying cars is an expensive proposition for consumers.

- Mr. Jnaneswar Sen (GM, Marketing and Sales, Honda Siel Cars India) said.

We are mainly in compact cars. So for us the effect is insignificant. But yes, overall it may not be good for those players in the upper segment.

- Mr Arvind Saxena (Senior VP, Sales and Marketing, Hyundai) said.