Cars to be dearer by Rs 500-10,000 from mid-March

By Staff
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Google Oneindia News

New Delhi, Mar 1 (UNI) With the car makers not willing to bear the brunt of the one per cent additional education cess announced in the Union Budget 2007-08, the price hike is set to pass on the end-consumers.

The automobile firms have confirmed price rise, ranging from Rs 500 to Rs 10,000, across all models from middle of this month.

However media reports say Skoda will reduce prices by up to Rs 24,000.

Car market leaders Maruti (MUL) and Hyundai (HMIL) earlier in the day said they are yet to decide up the quantam of the price rise but media reports in the late evening said both the companies will hike the prices after March 15.

It says Hyundai will raise its Tucson model by Rs 10,000 and Santro and Verna by Rs 3,000 each. However Maruti has still not given the figures by how much it will hike its vehicle prices.

Describing the Government's hike on education cess as a burden on the companies, as now it will be passed on customers, MUL CEO and MD Jagdish Khattar said people who did not buy cars in the last month would suffer the price hike now.

''We will now pass this burden to the customers. People did not buy in February thinking that price will reduce after the Budget,'' CNBC news quoted him as saying.

General Motors India Vice President (Sales and Marketing) Ankush Arora said the increase in the price will be minimal ranging from Rs 575 to Rs 1475 for their products.

''Its just because of the new government regulation,'' he added.

Hyundai Motor India Managing Director H S Lheem said due to the one per cent increase in education cess in the Union Budget, Hyundai cars will cost more to the end consumer.

''The increase in price would be effective from sometime around the middle of the month although the exact quantum of increase is being worked on.'' Ford India said it will be considering an increase in the prices of the Fiesta and Ikon that have high local content. The company will study the impact of customs duty reduction on the price of the Endeavour.

The industry has expressed its disappointment over the budget calling it as more agriculture and education centric.

Mahindra&Mahindra (M&M) said it will hike its Scorpio model by Rs 2,000.

''We were looking for excise duty relief on larger passenger vehicles and wanted more on infrastructure creation,'' M&M Automotive Unit President Pawan Goenka said.

General Motors President and Managing Director Rajeev Chaba also said the auto industry expected a reduction in the excise duties on motor cars, phase out of CST, elimination of surcharge, withdrawal of FBT, removal of cess.

UNI

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