Maruti Suzuki, India’s leading carmaker, won’t be passing on the lower taxes, to the customers of its petrol variant Swift. The company stands to save about Rs 40,000 for each car due to reduced excise duty for the Swift’s smaller engine, but puts the blame on the cost hike for this decision. This is different from the past.
Normally car makers usually pass the tax cuts to customers by reducing prices. But this time it won’t happen. The company justified its stand by saying it has to balance cost rises in the Swift’s prices. The company blames the cost hike on the new petrol engine along with spurt in commodity prices.
Society of Indian Automobile Manufacturers (SIAM), the industry body of Indian carmakers says that it is a strong proponent of tax concessions, as it would lead to reduced prices and benefit customers. But it declined to comment on the Maruti stand. However industry experts say that Maruti has maintained the price for its new car despite a smaller engine to combat the higher competition foreseen in the premium compact car segment.
With the new engine, it is possible that Maruti can strengthen its position more in this car portion.
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