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After Finance Minister P. Chidambaram decided to reduce excise duty on automobiles in the interim Budget 2014-15, auto makers Tata Motors and General Motors India today announced they will cut prices of their products.
"We will definitely pass on the benefits of these excise duty reductions to the consumers for our new dispatches from tomorrow (as applicable) and are working on the details of the exact reductions," a Tata Motors spokesperson said.
The various cuts across the different categories of passenger and commercial vehicles is a very positive step as these will make the vehicles more affordable to the consumers as well as the transporters, she added.
"GM India will pass on the excise duty relief to its consumers and is currently studying the fine print to determine the exact amount across its car lines," General Motors India Vice- President P Balendran said.
Earlier in the day, P. Chidambaram announced cut in excise duty across various segments of automobiles in order to give a boost to the industry that has been on a prolonged slump.
Excise duty on small cars, scooters, motorcycles and commercial vehicles will come down to 8 per cent from 12 per cent earlier.
SUVs will attract excise duty of 24 per cent as against 30 per cent earlier.
Excise duty on large cars will now be 24 per cent compared with 27 per cent earlier, while the duty on mid-sized cars will go down to 20 per cent from 24 per cent previously. The excise duty cut will be applicable up to June 20, 2014.
Reacting to the announcement, market leader Maruti Suzuki India MD and CEO K Ayukawa said the Finance Minister's announcement was a much needed initiative.
"We hope it will revive sentiment, and encourage people to buy automobiles. With passenger vehicle industry in negative zone this year, this was a much needed step," he added.
Society of Indian Automobile Manufacturers (SIAM) President Vikram Kirloskar said the reduction in excise duty would reduce price thereby making vehicles more affordable which would improve the consumer sentiment and hopefully revive