SUVs to be cheaper next Budget

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New Delhi, Oct 11: The prices of some of India’s most sought after sports and multi-utility vehicles (SUVs and MUVs) could fall between Rs 30,000 and Rs 50,000, as the government plans to slash excise duty on them from 24% to 16% in the Budget.

The move would translate into cheaper sticker prices for vehicles like the Tata Safari, Tata Sumo, Toyota Innova, Chevrolet Tavera and the M&M Scorpio. This is expected to boost the demand for SUVs and MUVs, which grew 12.85% in the first half of this fiscal.

Industry experts estimate that the cut would help the segment grow by 15%. Around 1.9 lakh utility vehicles were sold in 2005-06, up 10.32% from 1.76 lakh in 2004-05. The government had cut the excise on small cars from 24% to 16% in Budget 2006.

Other vehicles like the Suzuki Grand Vitara and Toyota’s Prado will not be affected as they are imported as completely built units.

Currently, India’s cheapest MUV is the base model of the Tata Sumo, which costs around Rs 6 lakh and could go down by Rs 30,000. The cost of the most expensive utility vehicle, the high-end variant of the Tata Safari, costing around Rs 11 lakh, could fall Rs 50,000.

Officials at the heavy industry ministry said the move is in line with the Auto Mission Plan (AMP) 2006-16, which aims at promoting auto exports.

“We had requested the finance ministry to cut excise duty across the board before the last Budget,” KK Swamy, deputy managing director, Toyota Kirloskar Motor Ltd and chairman of the Committee on Taxation formed by the Society of Indian Automobile Manufacturers (SIAM) told FE.