Auto Industry Not Too Thrilled With Union Budget

Updated: Friday, March 1, 2013, 12:51 [IST]

It would be an understatement to state that the Indian auto industry is not too thrilled by the union budget announced yesterday by Finance Minister P. Chidambaram. Indian automakers as well as oversees brands such as Ford and Renault have expressed their unhappiness. However, the general mood regarding the budget has been that the finance minister, in a tight situation, has managed to walk the tightrope.

Here are some key points from yesterday's budget that concern the Indian auto industry - manufacturers as well as consumers.
What will cost more

•Sports Utility Vehicles
•Cars with engine capacity larger than 1500cc and measuring over 4000 mm put under the "SUV" category.
•Imported motorcycles with engine over 800cc
•Imported cars

While the increase in cost of imported vehicles does not come as a surprise, the fact that SUVs will cost more has negatively impacted many a plan by automakers, which will now have to be reconsidered. Duty on SUVs have gone up from 27 percent to 30 percent and this is what the Finance Minister had to say about it. "SUVs take a lot of space on the road, so the owners won't mind paying a bit more" However, SUVs that will be registered as taxis have been spared.

Duty on cars longer than 4000mm and engines larger than 1500cc has gone up from 22 per cent to 24 per cent. This means cars such as the SX4, Verna, Camry, etc,. will cost more.

Even smaller cars will cost more as the duty on them has been increased from 10 percent to 12.

Excise duty has gone up from 60 per cent to 75 percent for completely built imported vehicles with a price tag of USD 40,000.

The only good news comes to hybrid and electric vehicles, taxes for which have either been completely removed or reduced significantly.