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What Industry Bosses Say About The Budget
Many carmakers have said they were help less when it came to passing on the increased taxes on to their buyers. Almost all carmakers said they would increase prices with immediate effect. Here are some of the responses to the budget by Auto industry bosses.
Maruti Suzuki India MD Shinzo Nakanishi was very positive about the budget. He said: I commend the FM. Given the fiscal challenges, slowing GDP growth, inflation and an uncertain global environment, he had limited options. He has been pragmatic. In his service tax initiatives, he has been forward looking.”
Mahindra and Mahindra boss Dr Pawan Goenka said: “Specific to automotive industry, the industry is relieved that the FM did not take any retrograde step like imposing a tax on diesel vehicles. The excise duty hike was in a way expected and we will have to pass on the price increase to the consumer. However, with all the surcharges and special levies, the top excise duty rate is as high of 29%. I believe this is simply too high! “
“For Mahindra vehicles, the price increase would be as low as Rs. 3,000 to a maximum of Rs. 35,000 depending on the product category. On the tractor side, service tax and excise duty hike will also increase overall input cost and therefore an immediate increase of Rs. 3,000 – 5,000 is expected. We expect some short term negative impact on demand but with time we think it will wear off.”
Chetan Maini the founder, Chief of Technology and Strategy, Mahindra Reva while responding to the budget said: “This has been a rather disappointing budget for the Electric Vehicle (EV) Industry. There have been no benefit offered to the Industry and the increase in various duties/ cess will increase the cost of the EVs by 1 to 1.5%. The Basic Excise Duty on cars has been increased from 5% to 6% which will result in increase of 1% in the car price.”
“The increase in excise on parts (input) has been increased from 10% to 12%. Lithium batteries were exempt from customs duty, however the increase in Countervailing Duty (CVD) from 5% to 6% will increase the cost of batteries. Overall, the budget is not very encouraging for the electric vehicle industry.
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