Automakers slash prices; dealers ask for bailouts

Automakers slash prices; dealers ask for bailouts
PTI
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First Published: Wed, Dec 10 2008. 07 04 PM IST
Updated: Wed, Dec 10 2008. 07 04 PM IST
New Delhi: Country’s major carmakers on Wednesday announced price cuts ranging up to Rs1.21 lakh in response to the government’s move to cut CENVAT amidst calls for bailout by dealers who said they could be hit by up to Rs600 crore due to reductions in rates by manufacturers.
Led by India’s largest carmaker Maruti Suzuki India, others such as Hyundai Motor India, Toyota Kirloskar Motor and Hindustan Motors slashed the prices of their various models.
The highest amount of reduction is on Toyota Kirloskar Motor’s imported sports utility vehicle ‘Prado’ by Rs1,21,330, while the least reduction of Rs6,593 is on Maruti’s oldest model ‘M800’.
The price cuts, however, were met with dealers’ call for bailout deals by carmakers.
“Manufacturers have, by and large, announced decisions to pass on benefits of CENVAT reduction to the customers. However, the automobile dealers, saddled with huge inventories for 30 to 60 days, find themselves in a bind,” Federation of Automobile Dealers Associations President S P Shah said.
Unless manufacturers come forward with their own packages to compensate automobile dealers for inventories already lying at their dealerships, automobile dealers collectively may have to take a hit of Rs500 to Rs600 crore in clearing the existing stocks at the revised prices that may be announced by the manufacturers, he added.
Responding to it, Society of Indian Automobile Manufacturers Director General Dilip Chenoy said there have been instances in the past when manufacturers and dealers have jointly worked to address such issues after excise duty cuts.
“This time the situation may be different, but there may be a need to evolve a joint strategy to address the problem,” he said.
Detailing its price cuts, Maruti Suzuki said it had cut prices in the range of Rs6,593 and Rs23,187 across various models. Its oldest model ‘M800’ is cheaper by Rs6,593 to Rs7,516.
The price of the company’s best selling model ‘Alto’ has been reduced by Rs8,028-Rs9,814.
‘WagonR’, a compact car from MSI, will be cheaper by Rs11,167-Rs12,793.
The company said it has also cut the price of latest model ‘A-Star’, ranging between Rs12,156 and Rs14,392. The company had launched the car with an introductory price ranging between Rs3.50 lakh and Rs4.15 lakh.
Premium hatchback ‘Swift’ will now be cheaper by Rs 12,458-Rs 17,868 across petrol and diesel variants. Maruti’s mid-sized sedan ‘DZiRE’ will now be cheaper by Rs14,699-Rs21,784 across petrol and diesel variants.
The company’s bigger sedan ‘SX4’ will also witness price cuts ranging between Rs19,752 and Rs23,187 across different trim levels.
Country’s second largest carmaker Hyundai slashed the prices of all its models by up to Rs44,792.
The company reduced the prices of its flagship ‘Santro’ between Rs8,834 and Rs12,492, while ‘i10’ — HMIL’s latest offering to the market — would now be available between Rs3.26 lakh and Rs5.25 lakh, cheaper by up to Rs18,381.
HMIL also said its premium hatchback ‘Getz’ would be cheaper by Rs13,413-Rs19,422 across different variants.
Its top-end sedan ‘Sonata’ has been made cheaper between Rs38,006 and Rs44,792.
Toyota’s multi-utility vehicle Innova’s price has been reduced by Rs23,980-Rs32,780, while ‘Corolla Altis’ would be cheaper between Rs34,100 and Rs40,750.
Another automaker Hindustan Motors announced reduction of all Mitsubishi cars by up to Rs1.19 lakh.
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First Published: Wed, Dec 10 2008. 07 04 PM IST