Budget 2013 and how it affects Indian auto industry
Union Budget 2013 was revealed today by Finance Minister P Chidambaram. In brief, the 2013 budget will affect prices of SUV’s and fully built cars and motorcycles.
Mr Chidambaram has proposed increase in excise duties on SUVs from present 27% to 30%. This will probably affect prices of India made SUVs and MUVs like Mahindra XUV500 and Toyota Innova. The reason behind increasing the excise duties of big cars, is because they occupy a larger parking space, says Mr Chidambaram. The SUVs bought as taxis will not be levied with this increase in excise duty.
Apart from this, Mr Chidambaram also proposed to increase the import duty from present 75% to 100% on completely built cars. This will affect the pries of cars from Lamborghini, Porsche, Ferrari, some models from BMW, Audi, Jaguar, Land Rover and Mercedes Benz. For completely built motorcycles with engines above 800 cc, the duty has gone up from 60% to 75%, this will affect the high end motorcycles from Harley Davidson.
Joginder Singh, president and managing director, Ford India had this to say about the Union Budget 2013-14, “We welcome the focus on infrastructure development, social benefits for inclusive and sustainable growth in the country. The investment allowance to boost the manufacturing sector is a positive move. The automobile industry is a significant contributor to India’s economy and future growth potential. We are disappointed that there is very little in the budget that will help boost consumer confidence and revive growth. It is a missed opportunity to introduce measures that would have revived industrial growth significantly. As we all know the automotive industry has been going through very challenging times, we are disappointed with the increase in the excise duty for SUVs.”