Budget 2012: Luxury cars to become dearer by up to Rs 3 lakh

Cars will become expensive by up to Rs 3 lakh as automakers today decided to pass on increased tax rates in the Budget to consumers.

Two-wheeler makers have also decided to take similar steps, as a disappointed auto industry braces to come to terms with the steep hike in excise and customs duties.

While the least hike will be of about Rs 1,000 for a two-wheeler, the highest so far has been estimated for a premium vehicle of Mercedes-Benz India at Rs 3 lakh for its imported cars.

Auto makers like Maruti Suzuki, Hyundai, Tata Motors, Mahindra & Mahindra and India Yamaha have expressed their unhappiness over the government's decision to hike the duties. They, however, expressed relief over non-imposition of any additional tax on diesel vehicles.

"The increase in excise duty will hurt automobiles at a time when industry is in the midst of a slowdown due to the combined effect of high interest rates and high fuel prices," Maruti Suzuki India (MSI) Managing Director and CEO Shinzo Nakashi said.

MSI Managing Executive Officer (Marketing and Sales) Mayank Pareek said the company will raise the prices of its entire range of vehicles.

Luxury car maker Mercedes Benz India said it will hike its product prices by up to Rs 3 lakh due to high duties imposed in the Budget.

"We are going to pass on the additional burden to customers. We have not decided the exact amount yet, but on an average it will vary between Rs 2 lakh and Rs 3 lakh," Mercedes Benz India Director (Corporate Affairs and HR) Suhas Kadlaskar said.