Effect of Union Budget 2013 - 2014 on Indian Auto Sector

[rohit0103]

Conditions for a vehicle to be classified as SUV is :
1. It should have a CC of 1500 and more.
2. Should have a length of exceeding 4000mm
3. Should have a ground clearance of 170 mm and above.

See the attached image of original notification of budget.

So, does it imply a regular so called conventional sedan which is > 4000 mm, Engine cc >1500 and GC >170 will also be considered in the above mentioned new category of 30% ?

Which are such sedans ? I think due to GC factor, may not be many, although engine cc may be higher.

Other so called SUV's may be safe due to length (Quanto, Ecosport) or Engine Capacity (Ertiga).

 

[ashikawa]

So, does it imply a regular so called conventional sedan which is > 4000 mm, Engine cc >1500 and GC >170 will also be considered in the above mentioned new category of 30% ?

Which are such sedans ? I think due to GC factor, may not be many, although engine cc may be higher.

Other so called SUV's may be safe due to length (Quanto, Ecosport) or Engine Capacity (Ertiga).

From the reading of the notification this is suppose to happen. Renault Fluence will be one to fall under this category. This is why cars have 1198/99 , 1498/99 cc engines and 167/8/9 mm of GC.

 

[RonnS]

Hi all this is the first post from a newbie . I am really concerned about ertiga as i am planning to buy one in this year (may be mid '13). Ertiga is more than 4 M length, GC is 185mm but engine is only 1.3 L. whether it will be considered as a large SUV . Can anyone please clarify

Check out ecosport once before going for ertiga.

 

[D.J.D.]

Hi RonnS

Thank you for your suggestion. In fact i am regularly following the Ecosport thread. But my main concern is space. And after seeing the pics of Ecosport i think it will not be as spacious as ertiga. As u can see i do lot of night driving, i need a spacious car so that i can make a bed for my daughter and wify and also i will be using my car to transport my pets. We carry lot of luggage during journey.

 

[Raja]

Hi RonnS

Thank you for your suggestion. In fact i am regularly following the Ecosport thread. But my main concern is space. And after seeing the pics of Ecosport i think it will not be as spacious as ertiga. As u can see i do lot of night driving, i need a spacious car so that i can make a bed for my daughter and wify and also i will be using my car to transport my pets. We carry lot of luggage during journey.

In ecosport you can fold the entire rear seat , but then wont be able to make your family sleep and have pets too and luggage it will be too tight .

Ertiga seems a better choice .

 

[Gurrala74]

DJD

Welcome to TAI !! for your space requirement nothing can really beat Ertiga at that price and Maruti reliability buddy. Yes Ecosport will a josh machine, but only 5 any point of time, if you want more, then you littrally make it a 2 seater and fold the back seats

 

[D.J.D.]

thank you Raja. i can take your words with eyes closed coz u have seen and felt the ecosport. So it seems to be ertiga for me. but i am really concerned about our FM's so called SUV definition .

@ Gurrala

thank you Gurrala. yes for the space requirement nothing can beat ertiga at this price point. actually i am not concerned about 7 seating. i want a comfortable highway cruiser with ample space. and i don't want a full blown SUV or big MUV as it will be cumbersome for city use.

 

[Gurrala74]

thank you Raja. i can take your words with eyes closed coz u have seen and felt the ecosport. So it seems to be ertiga for me. but i am really concerned about our FM's so called SUV definition .

Eritiga absolutely out of that SUV classification of FM and buy it in March itself buddy you will never regret with Ertiga as one of my friend bought it a week back and enjoying it to optimum

 

[D.J.D.]

that you gurrala. that's a relief for me

 

[visran]

Prices of SUVs like Mahindra's XUV 500, Scorpio, Toyota Innova could increase by up to Rs 60,000

This excise hike applies to all vehicles that carry 1500cc engines (both petrol and diesel), are over 4 m in length and have a ground clearance of 170 mm. It may include variants of sedans like Maruti SX4 (petrol) and Honda Civic. SUV prices could increase by Rs 20,000 to Rs 60,000.

Budget 2013: Prices of SUVs like Mahindra's XUV 500, Scorpio, Toyota Innova could increase by up to Rs 60,000 - The Economic Times

 

[visran]

Budget reaction 2013: Hindustan Motors

The auto industry has been the worst affected by the ongoing economic slowdown. The current fiscal has registered virtually no growth in the car segment. No wonder, hike in excise duty on SUVs from 27 per cent to 30 per cent has come as an unexpected blow. The last budget too had witnessed excise on SUVs going up from 22 per cent to 27 per cent. The auto industry was expecting reduction in excise across all vehicle segments to combat the current crisis. The 10-year Auto Mission Plan has also been talking of a favourable excise regime for the industry. Notably, cut in excise duty from 12 per cent to 8 per cent had helped the auto industry in somehow bearing the brunt of the 2009 downturn. Nothing of the kind has happened this time. Thankfully, the excise hike is limited to SUVs.

The finance minister has, however, given hope to the auto industry by allocating Rs. 14,873 crore to Jawaharlal Nehru National Urban Renewal Mission (JNNURM) which will lead to growth in public transport. Companies in the commercial passenger vehicle segment should benefit. The move is also in line with the socio-economic reality of the country. One hopes that the finance minister will offer some incentives specially for smaller automobiles, which form the bulk of total auto sales, before the budget is eventually passed. The auto industry is amongst the biggest employers and tax payers. It cannot be allowed to languish for long.

 

[visran]

SIAM terms budget as tight rope walk under current circumstances

S. Sandilya, President, SIAM welcomed the Union Budget 2013-14 tabled by the finance minister P. Chidambaram and said that under the current economic environment, the Finance Minister has tried to balance the need for growth with fiscal compulsions.

He stated ``The announcement of investment allowance reintroduction is very positive. Focus on infrastructure is also a welcome move which will help growth of the economy. While there are several innovative proposals, the auto industry had expected that the Finance Minister would come out with more specific roadmap for implementation of Goods & Services Tax (GST). The industry would be keenly looking forward to full implementation of GST at the earliest.’’

According to him ``SIAM appreciates the Finance Minister’s gesture of allocating double the funds under JNNURM scheme enabling substantial part for purchase of upto 10 thousand buses.This was very much needed for revival of CV sector. Finance Minister has also accepted SIAM recommendation to lower excise duty on commercial vehicle chassis from 14% to 13% which was raised in the last budget and led to significant drop in off-take of chassis by the body builders. With a view to deteriorating market sentiments, SIAM had also recommended reduction of excise duty for passenger cars by 2% which could have led to significant improvement in sales.

However, the Finance Minister has accepted SIAM’s recommendation on extension of concession for import of electric and hybrid electric vehicle parts till 31st March 2015. The increase in customs duty for luxury cars and motorbikes seems to be an effort to raise more revenue and to encourage local manufacturing, value addition and employment. The proposal to increase duty on second hand vehicle from 100% to 125% is the right step. It clearly conveys that India is not ready to accept second hand old vehicles from other countries.’’

Also SIAM was not impressed with SUV excise duty hike. ``The other area which the industry did not expect was the increase in excise duty on SUVs used as personal vehicles. This is the only segment in the industry which has been doing well this year and increasing price of these vehicles would dampen sales and impact market sentiments further,’’ the statement read further.

S Sandilya thanked the Finance Minister for accepting various suggestion of SIAM and hoped that the budget will help take the industry back to growth path and improve performance of the industry. The critical thing, however, will be speedy implementation of the policies, he said.

 

[Gurrala74]

Hmm, to my wonder I received calls this morning from Mahindra as well TATA saying that prices are going to increase from April 1st due to budget, so asked me book one immediately with full amount so that they can invoice it within march.

A quick move by both of them, and Yes if any of our member who is looking to buy an SUV, should hurry and do it immediately to avoid that hike

 

[rohit0103]

I wont be surprised to see a notification/addendum being circulated in next few weeks tweaking the so called parameters, so redefine the parameters of of so called SUVs.
But, if it is done, it has to be within next 4 weeks, as this comes into effect from 1st April.

 

[Raja]

Mumbai: A surprise hike in tax on SUVs in India risked hurting one of the only bright spots in the country's automotive market, sending industry shares falling on Thursday after a Budget that offered little help for the struggling industry.

"No quarrel if all large cars are taxed... singling out SUVs destroys a level field.Sad,one has to fight harder to succeed in one's own country," tweeted a dismayed Anand Mahindra, chairman and managing director of Mahindra & Mahindra, the manufacturer of popular SUVs such as Scorpio and XUV 500.


Budget 2013: Singling out SUVs destroys level field, says Anand Mahindra - NDTVProfit.com

My +10000000000000 to mr mahindra .