The government has proposed to impose a 2.5% cess on diesel vehicles of length not exceeding 4-meter and engine capacity not exceeding 1,500 cc, while higher engine capacity and SUVs as well as bigger sedans were slapped with a cess of 4% on the value of the car, this has forced car manufacturers to increase their selling price.
Mercedes-Benz India announced an upward revision of the price of its entire model range, effective from March 15, 2016. The price increase would be between 3% and 5% depending on the model. The imposition of an ‘infrastructural cess’ as well as an additional ‘luxury tax’ announced in the Union Budget 2016, has negatively impacted the prices of the Mercedes-Benz model range.
Roland Folger, Managing Director & CEO, Mercedes-Benz India commented, “Contrary to our expectation of some relief in terms of rationalization of duties, the introduction of additional duties and taxes in this year’s Union Budget has adversely affected our pricing. On top, the steady rise of input costs against the backdrop of a weakening Indian currency has further eroded our bottom-line.”
Honda has hiked the price of Brio by Rs. 4000 – 6000, Jazz by Rs. 5000 – 19500, City by Rs 24,600 – 38,100; Mobilio by Rs. 21,800 – 37,700 and CR-V by Rs. 66,500 – 79,000.
Commenting on the price hike, Rakesh Srivastava, Sr. VP, Sales and Marketing, Hyundai Motor India Limited said, “The new levies in Union Budget 2016 have led to price increase across the models ranging from Rs 2,889 to Rs. 82,906. Today’s customers are discerning on net off value offerings. The change in price value equations could alter the overall demand, from within the segment to across the segments and fuel types.”
The price of base variants of Eon will rise up by Rs.2,889, i10 will be costlier by Rs.3,848; Grand by Rs.4,286; Xcent by Rs.4,726; Elite i20 by Rs.4,886; Active i20 by Rs. 5,857; Verna by Rs.5,677; Creta by Rs.27,192; Elantra by Rs. 45,044 and Santa Fe by Rs.82,906.
Utility major Mahindra & Mahindra reportedly announced an increase in prices of its passenger vehicles by Rs.5,500 to Rs.47,000, effective from April 1, 2016.