Maruti Suzuki May Cut Prices Following Corporate Tax Reduction

Maruti Suzuki India Limited is considering revising prices of its domestic portfolio thanks to the reduction in corporate taxes. Maruti's Chairman, RC Bhargava, said that the company was looking at a solution and that an announcement will be made in a day or two. He also said that the brand cannot afford to wait for a month.

Maruti Suzuki May Cut Prices Following Corporate Tax Reduction

Companies like Hyundai, Toyota, and Honda however, have said that they will offer only discounts during the festive season. Offers and benefits have reached higher levels than before, and offers are provided across a majority of segments.

Maruti Suzuki May Cut Prices Following Corporate Tax Reduction

Shekar Viswanathan, the Vice President of Toyota Kirloskar Motor, thinks that the lower corporate tax rates will help improve cash flow for brands but the impact on the pricing of products is uncertain.

Maruti Suzuki May Cut Prices Following Corporate Tax Reduction

Better cash flows can result in more investments toward research & development, CSR activities, shareholder benefits, and product development.

Maruti Suzuki May Cut Prices Following Corporate Tax Reduction

Companies like Honda Cars India feel that the existing offers and discounts are good enough at the moment and there is no scope for price cuts across its domestic portfolio.

Maruti Suzuki May Cut Prices Following Corporate Tax Reduction

Hyundai Motor India Limited however, has offered discounts to customers and are currently studying the difference the reduced taxes will bring but passing on benefits to customers is highly unlikely. The company feels that multiple factors have to be considered from the point of overall profitability.

Maruti Suzuki May Cut Prices Following Corporate Tax Reduction

An increase in prices have added to the slowdown in the auto industry. Manufacturers feel that any reduction in prices via offers & discounts or a revision in prices will help turn sales around.

Maruti Suzuki May Cut Prices Following Corporate Tax Reduction

Thoughts About The Possible Reduction In Prices

This may a critical move for manufacturers. As is, the industry is still in a slowdown and a reduction in prices of vehicle could help increase sales. We think it is great initiative by Maruti Suzuki, and we hope other manufactures get on the bandwagon soon. We also feel that manufacturers will offer more discounts all the way up to March 2020. We hope things turn around for the industry soon.

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Read more on: #maruti suzuki
Article Published On: Tuesday, September 24, 2019, 11:40 [IST]
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