GST impact on cars: Honda slashes prices by up to Rs 1.31 lakh, sales increase by 12 percent

Honda has now also joined the bandwagon of several brands that announced GST discounts, announcing price cuts up to Rs 1.31 lakh across its model range

By:Updated: July 5, 2017 4:42:37 PM

Goods and Services Tax (GST) has proven to be a good news for prospective car buyers as several car manufacturers have announced discounts on their product line-up in line with the latest uniform tax structure. Honda has now also joined the bandwagon, announcing price cuts up to Rs 1.31 lakh across its model range. The onset on GST has brought prices down on various segments of cars. Even small cars have seen some reduction in prices. While small petrol cars were earlier taxed at 31.4 percent, they will now be taxed at 29 percent. Similarly, small diesel cars were taxed at 33.4 percent, whereas now the tax has been brought down to 31 percent.

The company has cut the price of its hatchback Brio by up to Rs 12,279 and that of the compact sedan Amaze by up to Rs 14,825. The price tag on the Jazz has been lowered by up to Rs 10,031 and that of the recently launched model WR-V by up to Rs 10,064. The price of mid-sized sedan City has been reduced in the range of Rs 16,510 and Rs 28,005. The BR-V prices will come down by up to Rs 30,387. Its premium SUV CR-V has also seen a price drop of up to Rs 1,31,663. The revised prices are all ex-showroom, Delhi and will vary from state to state.

Honda is yet to decide on the revised pricing of Accord Hybrid, which is likely to see a price hike since taxation on hybrid cars has been raised higher. GST effect: Here’s how the prices of hybrid cars in India could be affected

Several auto brands have announced similar price cuts post application of GST, including Jaguar Land Rover, Toyota, Maruti Suzuki, BMW and Ford. Read about them here.

In addition to the GST impact, the company also witnessed a growth in sales in the January to June 2017 period. The Honda City became the highest selling model in its segment clocking a cumulative figure for the first half of this year at 34,125 units. The WR-V too drove the sales growth selling 4,243 unit in June. The premium hatchback, Honda Jazz and the compact sedan, Amaze from the Japanese carmaker achieved satisfactory results selling 1,307 units and 1,193 units respectively. The least sold model from the company’s stable was the CR-V which sold only 24 units, while the BR-V and the Brio received a lukewarm response with sales of 567 units for the SUV and 283 units for the hatchback. The pre-GST benefits that were passed on to customers before the new tax structure’s implementation on 1st July, 2017, also worked in the company’s favour. Cars like the Honda City which attracted about 46 percent tax has now dropped to 43 percent. For larger cars, GST has also worked even more in favour. The only model from Honda Cars India’s stable that will take a hit in terms of a considerable price rise as hybrid vehicles which were taxed at about 30 percent will now entail 43 percent.

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