Budget 2012 and its After Maths

Are you planning to buy a diesel car shortly? Were you afraid of the speculations about ‘Diesel Tax’ to be imposed on diesel engine powered cars earlier? Well, now you can relax. Our honorable Finance Minister, Mr. Pranab Mukherjee has announced the Union Budget 2012 in front of the parliament and there are no extra taxes imposed on diesel cars. However there are increase of excise duties and import duties for various segment cars. We’ll sum it up for your convenience.

MotorBash Budget 2012

– Excise duty for all cars faced an increment of 2%. It used to be 22% earlier and now will be 24%, effective from midnight.

  • This decision is about to hike prices of all cars in the market. Prices of small cars like Maruti Suzuki Alto, Tata Indica, Hyundai i10 etc will go up between INR 4,000 to INR 20,000 depending upon the model and variant.

–  For cars with length more than 4 meters, engine displacement more than 1200 CC in case of petrol cars and 1,500 CC in case of diesel cars, the excise duty levy that will apply is now 27% as against 22% earlier.

–  Import duty for SUV and MUV costing more than $40,000 and imported as CBU (Completely Build Units) has been increased from 60% to 75%.

  • These decisions will affect prices of large cars like Maruti Kizhashi, Honda Civic, Toyota Camry, Volvo Cars, Mercedes Luxury Cars, BMW Luxury Cars, Audi Luxury Cars, etc and SUVs like the BMW X1, X5, X6, Audi Q1, Honda CR-V, Hyundai Santa FE, Nissan X-Trail, Volvo SUVs etc. Buyers of these cars will now have to shell out INR 35,000 to INR 4 Lakhs!

–  Import duty of CKD (Completely Knocked Down) vehicles is raised to 75% from 50% earlier.

  • This decision is going to affect the prices of cars like Porsche 911 Carrera, Lamborghini etc.


The price hike announced by Various Manufacturers:

  • Toyota: INR 9,500 to INR 80,000
  • Mahindra: INR 3,000 to INR 35,000
  • Mercedes-Benz: INR 2,00,000 to INR 3,00,000
  • Tata Motors: INR 3,000 to INR 75,000
  • Honda: INR 4,000 to INR 70,000
  • General Motors: INR 3500 to INR 80,000
  • Maruti Suzuki: INR 4,000 to INR 70,000


Reactions from the officials of the Luxury Car Makers:

Lowell Paddock, President and Managing Director of General Motors India expressed his disappointment with Budget 2012 saying: “As far as the automotive industry is concerned, it did not meet the expectations. The industry did not expect any increase in excise duty on passenger cars. In fact, the industry expected the government to announce   some other measures to fuel demand of vehicles which have also not happened.  This was essential as the automotive industry makes a significant contribution to the growth of the economy which continues to remain sluggish.”


Audi India Head Michael Perschke said: “The increase in excise and customs duty on large cars in this budget is very surprising. This increase comes at a time when the Indian automotive industry was finding favor with customers looking for better and efficient cars. We may now need to re-evaluate our pricing strategy inIndia.”


Lowell Paddock, President and Managing Director, General Motors India said the excise duty increase from 10 to 12 percent is a disappointment. “Since the bulk of our sales are in the small car segment, we will have to analyze their pricing. I don’t think we have a choice when it comes to passing the price increase to the customer” he added.




Arghya Pan

Team MotorBash

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