Owing to CENVAT rate cut by Government of India, car makers are set to cut the prices of their models. Maruti Suzuki , Tata Motors, GM India and Mahindra & Mahindraannounced that they would pass on the entire benefit of the four per cent cut in Central Value Added Tax to the consumers. The ad valorem component of large cars have been reduced from 24 per cent to 20 per cent. In case of small cars, the ad valorem component has been reduced to 8 per cent from 12 per cent. Maruti Suzuki Chairman R C Bhargava said: “A four per cent reduction in CENVAT means price of each product will come down by four cent… as per my understandingall car prices are likely to come down by four cent.” Tata Motors spokesperson said: “The company will pass on the benefit… across products– passenger and commercial vehicles. We are still working on the details.” Mahindra and Mahindra President (automotive sector) Pawan Goenka said, “We will absolutely pass on the benefit…with immediate effect…. This will certainly help in increasing the demand”. P Balendran, Vice-President, GM India, also said that the company will pass on the benefit to the customers.
Price cut is expected to be in the range Rs10000 – Rs20000 depeding on the various models. More details on Government Rs300,000crores stimulus package and its impact on automotive industry at http://vicky.in/stocks