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Car prices to go down

Started by sajiv, Dec 08, 2008, 11:51 PM

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sajiv


Car prices to go down; cos give thumbs up to stimulus

New Delhi Heralding the government's package to stimulate the economy,major auto companies, including the market leader Maruti Suzuki, today announced to cut prices of its vehicles by up to four per cent.
The governments stimulus package, which announced afour per cent reduction in Cenvat is likely to give a shot in arm to struggling auto sector, which has seen a slump in demand.

All major auto makers are expected to pass on the benefit of the duty cut to the consumers who can expect at least four per cent cut in automobile prices from mid-night today.

Major Auto maker Maruti SuzukiChairman R C Bhargava said "A four per cent reduction in Cenvat means every product will come down by four cent...As per my understanding all car prices are likely to come down by four cent".

Mahindra and Mahindra President (automotive sector) Pawan Goenka said, "We will absolutely pass on the benefit from the excise duty (Cenvat) cut with immediate effect.... This will certainly help in increasing the demand although we are not clear whether the cut is applicable across-the-board as, at present, different vehicles have different excise duty".

However, he said, "We are a little disappointed that the stimulus package has not addressed the specific issue of availability of funds in auto sector. We expect that today's reduction in excise duty and RBI's move to increase liquidity will help in boosting demand".

Though Maruti is upbeat to pass on the whole benefit to its consumers, another auto manufacturer General Motors India said, it is yet to decide on the price reduction.

"We have not read the fine print. At the moment, we are not able to comment on passing on the benefits," GM India Vice-President P Balendran said.


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