Get ready to pay more for that new car

If you’ve been waiting for the budget before buying a car, now’s the time to regret that decision. With the increase in central excise duty on cars, you will have to shell out more for one now. The budget has an increase of 2% on duty in the automobile sector. The new duty on small- and mid-segment cars is 10% as opposed to 8%.

For Multi Utility Vehicles (MUV), Sports Utility Vehicles (SUV) and large cars the increase is from 20% to 22%.

Car dealers across the city have already stopped selling cars at old rates and are waiting for new quotations from manufacturers. People can expect a rise in car prices from Rs3,000 to Rs15,000 in the mid-level segment, and for MUVs, SUVs and large cars, the rise could be around Rs20,000 to Rs50,000 depending on brand and pricing.

A spokesperson for Maruti Suzuki India Limited confirmed the price rise for small and mid-level cars would be Rs3,000 to Rs13,000. Hyundai Motor India has increased prices between Rs6,000-Rs25,000 across models. Other auto makers are also hiking prices in the region of 2%.

As there will be greater impact on small cars where the price hike will be in the region of Rs3,000-Rs6,000, sedans will not be greatly impacted as that segment is not price sensitive.

In case of motorcycles and scooters, there will be a hike of around 2%.

General Motors has said the price rise would be between Rs6,200 and Rs22,000. Umesh Shanbhag of Bodyline Motors, Dadar, said, “Rates of all cars will increase by 2% to 3%, but this is marginal.”

Sanjeev Bafna from Seva Automotive said, “There might be a sentimental pullback by the customer for a week or so, but once the hike is digested, the market will be back on the growth path.”
Central excise duty on petrol and diesel translates to a hike of Rs2.67 per litre and Rs2.58 per litre (in Delhi) respectively. Excise duty on electric cars has also been introduced this year.

Chetan Maini, deputy chairman, Reva, said, “The Budget mentions excise duty on electric cars at 4%. We are still trying to analyse the impact of that increase. The positive part is the components /inputs that are used in electric cars are exempted from custom duties. The clean energy fund created will be beneficial and taxing pollutants will help in developing the new energy products.”