Want a Maruti? Buy it before the FM cuts excise!

new delhi: believe it or not, you may have been better off buying india's entry level car, maruti 800, last year before the budget when excise duties were higher at 40 per cent. if this sounds crazy, sample this. the maruti 800 today at a 32 per cent excise duty rate has now become more expensive than it was last year before the budget at a 40 per cent tax slab. with a huge cut in excise duties on passenger cars of around 8 per cent you might ask that the cars ought to be cheaper. well, that was the idea as yashwant sinha saw it but with successive price hikes, maruti udyog has done otherwise. this means that not only the entire benefit of 8 per cent in excise cut been gobbled up and not passed on to the consumer, it has also hiked prices. this has however, definitely boosted maruti's bottomline. maruti has justified the price hike saying it was on account of mounting cost of inputs and depreciating rupee. the revision is between 0.85 to 3.87 per cent. despite mounting input costs and depreciating rupee, the effort has been to keep price revision to the minimum. the company has instead implemented a wide range of measures to cut cost and enhance quality, according to maruti. and given this scenario, no wonder, the finance minister has not been too happy with the passenger car industry for repeated price increases which have negated the whole idea of excise cuts as the consumer gets no benefit and the margins stays with the manufacturer. the maruti 800 standard after the price hike on monday now costs rs 2.21 lakh (ex-showroom delhi) against rs 2.18 lakh before the last budget. maruti also increased prices of the 800 deluxe, omni and esteem. maruti has only increased prices of products where either there is no competition or where depreciation has been taken care of and immediately adds to the bottomline. the products that have been spared are the ones where it is facing intense competition. maruti being the market leader has been at the forefront of the price hike brigade while some other car manufacturers have also been enthusiastically doing it. clearly, the finance minister's warnings to the car industry not to hike prices after a bold decision to cut excise duties after many years has not worked. since the budget — which slashed excise duties on cars by 8 per cent — there have been not one but three price increases, led by maruti. immediately after the budget, mr sinha had expressed his displeasure over the reported moves to increase prices. mr sinha had then told et, i am disturbed over the irresponsibility of car companies that have raised prices despite a cut in excise duty. the excise cut should have been passed on to consumers, which the companies did initially, but they are again raising prices.

Want a Maruti? Buy it before the FM cuts excise!

NEW DELHI: Believe it or not, you may have been better off buying India’s entry level car, Maruti 800, last year before the budget when excise duties were higher at 40 per cent.

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