Leading car makers in the country hiked the central excise duty to 10% in response to the government’s decision to increase the excise duty. This hike is likely to push up the car prices by up to Rs. 25,000. The country’s biggest car manufacturer, MarutiSuzuki India (MSI), said its car price will rise by 2%. Hyundai Motor India said it will lead to an increase of Rs. 6,500-25,000 in prices on an average.
MSI Chairman R C Bhargava said “Car prices will go up by about two per cent. This is essential to offset the increase in central excise duty announced by the Finance Minister today”.
Meanwhile, a Hyundai Motor spokesperson said: “We will be forced to hike our prices by Rs 6,500 to Rs 25,000.”
Volvo Auto Indiaalso said that the hike in excise duty will lead to an increase in price of its cars.
With interest rate on car loans set to go up, it looks like demand for cars will slow down.