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GST Effect: Maruti Suzuki Reduces Prices Of Some and Increases Prices Of Some Of Its Cars
Maruti Suzuki is set to increase prices of some of its cars and decrease prices of most of its cars after implementation of GST.
The Goods and Service Tax (GST) system is all set to be implemented in India and affects automobile manufacturers in many ways, increasing the prices of some products and decreasing the prices of some others. India's largest selling car manufacturer, Maruti Suzuki too has been affected by the GST scheme and some of its products have begun selling well, while others are expected to have a drop in sales.
According to the GST bill, a standard peak rate of 28 percent has been implemented across all passenger vehicles. Additionally, a cess of one percent has been imposed on small petrol cars less than 1,200cc, three percent cess on small diesel cars less than 1,500cc and 15 percent cess on larger SUVs and luxury vehicles.
Reports had revealed that a discount of up to Rs 70,000 was being offered on the Maruti Suzuki S-Cross. This massive discount has come about as Mid-size sedans, SUVs and Crossovers, all attract lower tax percentages under GST. The benefits of this price cut has been passed on to the customer.
An extended discount of between Rs 25,000 and Rs 35,000 is being offered on Maruti Suzuki's best-selling hatchbacks, the Alto, WagonR, Celerio and Swift.
While all these discounts surely have increased sales, all is not well with Maruti Suzuki, as the new taxation norms impose a 43 percent tax rate on Hybrid cars, which is triple that it was earlier.
Diesel variants of the Maruti Suzuki Ciaz and Ertiga are equipped with Smart Hybrid Vehicle System (SHVS) tech. Though SHVS tech does not make the car a proper hybrid, it is still considered a hybrid vehicle according to Indian Motor Vehicle laws.
The Maruti Suzuki Ertiga and Ciaz benefited from the Faster Adoption and Manufacturing of Electric and Hybrid Vehicles in India (FAME) scheme of the Indian government. This resulted in these cars selling well. Now, it might be the same SHVS tech which might bring down the sales of diesel-powered variants of the Ciaz and Ertiga.
The 43 percent taxation rate would result in the price increase of up to Rs 1.5 lakh on the diesel powered Ciaz and Ertiga. Maruti Suzuki in all probability would just discontinue the SHVS tech and re-start production of the standard diesel-engined Ciaz and Ertiga. The Maruti Suzuki Brezza too would see an increase of up to 3.5 percent in its price.
DriveSpark Thinks!
Maruti Suzuki would not be affected much by the GST system, as prices of its best-selling cars have been cut, which would, in turn, result in higher sales numbers. The Ciaz and Ertiga will suffer from an increase in price, but Maruti Suzuki can stop production of the SHVS tech to counter that. Hence, Maruti Suzuki will continue to remain at more or less the same position.
Also Read:
Maruti Swift Prices Drop Post GST
Maruti Suzuki Alto Prices Drop After GST
Honda Activa Prices Drop Post GST
KTM Motorcycles Prices Increase After GST
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