Mumbail: Auto makers plan to raise prices marginally to offset an additional tax proposed by the government to raise funds for education.
Top Indian car maker Maruti Udyog Ltd said on Wednesday it would raise prices of its vehicles from 15 March. It did not specify the extent of the increase or say which models it would apply to.
“In the run-up to the budget there was speculation that certain taxes or duties may come down,” Maruti said, referring to an expectation that excise duty on passenger vehicles might have been cut.
“Owing to that, several customers postponed purchase of new cars till after the budget. In light of this, the company has decided to defer the hike to allow these customers to purchase cars at pre-budget prices,” it said.
In its budget for the fiscal year starting 1 April, the government said it would impose a levy of 1% on all taxes to fund secondary and higher education, in addition to the existing 2% levy which raises funds for basic education.
Maruti, a unit of Suzuki Motor Corp. last raised prices on some models by up to Rs12,000 rupees on 1 February.
Tata Motors Ltd, the third-biggest car maker, will raise prices by up to Rs1,200, a business daily said. Mahindra & Mahindra Ltd, the top utility vehicle maker, will raise prices by Rs1,000 to Rs2,000, the paper quoted Pawan Goenka, president of Mahindra’s automotive unit, as saying.
A spokeswoman for Hyundai Motor India Ltd, a unit of South Korea’s Hyundai Motor Co., said there would be “a modest price increase”.
Shares in Maruti rose 2.4% to Rs860 rupees, helped also by strong February sales, while shares in Tata Motors gained 2.3% to Rs802 in a slightly firm Mumbai market.