A recent end in excise duty benefits and rising input cost has forced many leading carmakers in the country to hike up the prices of their offerings in India. India’s leading carmaker Maruti Suzuki however believes that withdrawal of excise duty benefits shall not affect auto sales in a major way. Maruti Suzuki Chairman RC Bhargava was quoted as stating, “Ultimately you have to look at the total affordability factor for the customer. While the car prices have gone up, if interest rates come down, if petrol prices come down it will offset the increase in price.”
RC Bhargava has also hinted on a possibility of the interest rates coming down. Moreover, decrease in petrol prices shall also absorb the impact of this new car prices. Hinting of company’s plans for venturing into SUV segment, Bhargava added, “We are getting into areas where we were not there, like the SUV segment. We will get into the SUV segment this year where we were not there. So in that sense we will be targeting those areas where we haven't been present. We will also get into the LCV segment.”
Speaking on the benefits of reduction in oil prices, Bhargava added, “As far as economy is concerned our current account deficit and out foreign exchange outgo will all become better.It has enabled the government so far to only partially pass the reduction in prices to the consumer. Rest they have absorbed as additional excise duty and are using that money, as Finance Minister said, for road building. So, it’s a great benefit to the economy as a whole.”
Source: ET
