Cars to become costlier as government withdraws excise duty cut

Auto companies may be propelled to hike auto price following government decision to withdraw excise duty concessions from January 1, sources said on Tuesday.

Earliler, in the interim Budget, UPA government had reduced excise duty to 24 percent from 30 percent in the case of SUVs, 20 percent for mid-sized car from 24 percent and 24 percent for large cars from 27 percent.

In June, the new government led by Narendra Modi extended the excise duty concession by six months to 31 December.

After two successive years of sales slump, the auto industry had shown some growth posting a growth of 10.01 percent in April-November period this fiscal at 1.33 crore units as against 1.21 crore units in the year-ago period.

Already, many automobile companies, including Maruti, Hyundai, Tata Motors, Renault, Nissan and Mahindra & Mahindra, have announced that they would increase prices of their vehicles from January citing rising input costs.

With PTI Inputs