Since the rollout of the Goods and Services Tax (GST) on July 1, several mass market and luxury automobile manufacturers have reduced the prices of their models, in some cases by up to 13 percent.
Under the unified tax regime, goods and products will be taxed under any of the four tax slabs – 5, 12, 18 or 28 percent. The simpler tax structure will replace a bunch of local, state and national taxes and pave way for a more transparent system.
Since its launch, a bunch of major automobile players like Maruti Suzuki, Ford India, Hero MotoCorp, Jaguar Land Rover (JLR), BMW and Audi India have announced a price cuts on various models.
However, owing to withdrawal of tax concessions on mild hybrid vehicles, the prices of vehicles in this category has increased.
Automobile major Maruti Suzuki India said that after the implementation of GST, the ex-showroom prices of its models have come down by up to three percent.
“The rate of reduction varies across locations depending on the VAT (value added tax) rates applicable prior to GST,” the company said in a statement.
Ford India has also reduced the vehicle prices by up to 4.5 percent with immediate effect. Although Hyundai Motors and TATA Motors haven’t announced any price cuts till now, they are expected to follow suit and reduce prices.
While the reduction in prices will vary from state to state, one of the highest price cuts will be in Mumbai, where a bunch of local and state taxes have been replaced.
According to luxury automobile manufacturer Jaguar Land Rover (JLR) India, it has reduced prices of its locally manufactured models by seven percent on an average.
“Post GST regime, Jaguar Land Rover’s locally manufactured prices have come down by seven percent on an average,” the company said in a statement.
Another luxury car manufacturer Audi India said that it has reduced prices between three to nine percent depending upon the model and region post GST implementation.
“The new realigned prices offer great opportunity to expand the market and widen our customer base,” said Rahil Ansari, Head, Audi India.
In addition, Toyota Kirloskar Motor reduced prices of its models by up to 13 percent. The company said that price change will vary from state to state, model to model and variant by variant depending on tax rates applicable prior to GST.
“We are hopeful that the price decrease post GST will further boost the customer demands in the coming months,” said N. Raja, director and Senior Vice President, Marketing and Sales, Toyota Kirloskar Motor.
“The GST will be fruitful for the growth of the Indian auto industry. We think the industry will break into double digit growth territory this year.”
Two-wheeler major Hero MotoCorp said that it has reduced prices of models across its product portfolio in most of the states.
“The quantum of reduction ranges from Rs 400 to Rs 1,800 on mass-selling models. The actual benefit varies from state to state, depending on the pre and post-GST rates,” the two-wheeler major said in a statement.
“Some of the premium segment models would see a reduction of up to Rs 4,000 in certain markets. In one or two states, such as Haryana, where the pre-GST rates were lower than the post-GST rate, the prices of a few models may go up marginally.”
While other two-wheeler manufacturers are expected to announce similar cuts, companies like Royal Enfield, Harley-Davidson, Triumph, and Ducati – which primarily manufacture bikes of over 350cc – may hike prices due to an additional cess of 3 percent.
With IANS inputsView Realtime Updates