Car cos to raise prices

Prices of four-wheelers will shoot up because of the proposed additional education surcharge

Maruti Udyog the biggest car maker in the country today declared that it will raise car prices starting March 15, because of an education surcharge proposed by the government.

The price hike range would be in the region of Rs 1000 to Rs 12,000, officials affiliated to auto Companies. Maruti Udyog Ltd (MUL), India’s largest car maker, will increase prices by as much as Rs 12,000 for different models, effective February 1.

Hyundai, the country’s second-largest car maker, is also expected to announce increases in some models tomorrow.

Jagdish Khattar, managing director, MUL, said: “We have informed all our dealers about the price hike. There has been steep rise in the cost of different raw material like steel and aluminum components. We are transferring a little burden of the rising cost to the customer."

Tata Motors and Mahindra & Mahindra also intend to pass on the education cess to the customers, officials said.

Finance Minister Palaniappan Chidambaram proposed a 1%additional surcharge to fund secondary education in the federal budget for the fiscal year starting April 1.

It was expected that prospective car purchasers were awaiting concessions for the auto sector and had therefore deferred purchases of new vehicles.

Bloomberg quoted Jnaneswar Sen, senior general manager, sales and marketing of Honda Siel Cars.

“We will be raising the prices of City, Civic and Accord models in the next few weeks as a sales-tax benefit we enjoyed until now will come to an end soon.”