Union Budget 2012: Everything About its Impact on Auto Sector

[cooldhaya]

Re: Government Raises Tax Upto 25% For Diesel Cars

SUV's must be taxed more by atleast 50%.

And why is that? Care to explain??



Just because you don't own an SUV and most of the SUV'S are run by politicians and goondas you can't give such blank statements buddy , justify your statement.

 

[Markiv]

Re: Government Raises Tax Upto 25% For Diesel Cars

And as far as diesel owners using their cars for small grocery trips, it all depends on the Eco-consciousness of the particular individual. Anyways with the parking problem in metros, cycling seems to be the next in thing.

Anyway, i think the govt definitely seems to be going to do something on taxing diesel cars. Which i think is unfortunate. They should concentrate on reducing the crude oil imports and on improving the rupee-dollar rates rather than taxing engines which give more mileage.

And if the inevitable taxing happens, I think they will do something on the lines of increasing a percentage in the car's annual insurance rates based on the IDV of the vehicle or something to fill their coffers. That way, they will ensure all those who already purchased diesel cars do not get away and they will also ensure that diesel car industry is not hit by a jerk.

I came to know that the arai certified mileage of a Ford fiesta classic diesel mileage is 32kms and that of the indicaev2 is 25kms. The state of technology has to be appreciated and encouraged.
PS: as far as SUVs are concerned, there are petrol innovas for sale which again give lesser mileage than their diesel counterparts.

 

[ramG]

Re: Government Raises Tax Upto 25% For Diesel Cars

This actually is quite a debatable topic. There are many people (like me) who admire few of those diesel powerhouses (read Vento & Verna diesel) for their sheer performance in terms of low-end torque and mileage - and for many this is the driving factor to choose a diesel, not the low running costs. At the same time I personally am against reaping illegitimate benefit from a subsidised fuel meant for other purposes in a developing economy.

And as far as diesel owners using their cars for small grocery trips, it all depends on the Eco-consciousness of the particular individual. Anyways with the parking problem in metros, cycling seems to be the next in thing.

Rightly said mate. In fact I am planning to get one for myself. Apart from from the environment it would be beneficial for my health too... :-)

And if the inevitable taxing happens, I think they will do something on the lines of increasing a percentage in the car's annual insurance rates based on the IDV of the vehicle or something to fill their coffers. That way, they will ensure all those who already purchased diesel cars do not get away and they will also ensure that diesel car industry is not hit by a jerk.

That I feel would even out the calculation a bit. But don't you think it would be unfair on the owners part who has already paid a premium to get those pricey diesel engines?

I came to know that the arai certified mileage of a Ford fiesta classic diesel mileage is 32kms and that of the indicaev2 is 25kms. The state of technology has to be appreciated and encouraged.
PS: as far as SUVs are concerned, there are petrol innovas for sale which again give lesser mileage than their diesel counterparts.

If you look at the overall picture things are different. Our country produces crude and imports crude. The amount of petrol produced out of the crude is roughly in the range of 45-55% which roughly converts to 55 liters of petrol per 100 liters of crude imported or produced. This is way higher than the percentage of diesel produced from crude (about 25-29%). Thus for an economy like ours actual cost of production for diesel is considerably higher than petrol. Considering this, for every 100 liters of crude imported you can run a petrol car for 55 x 12 = 660 kilometers (55 liters x 12 km/l) whereas a diesel car can be run for 29 x 18 = 522 kilometers (29 liters x 18 km/l).
Correct me if I am wrong... These are the figures I got from a friend working in an oil company...

 

[Prads]

Re: Government Raises Tax Upto 25% For Diesel Cars

I came to know that the arai certified mileage of a Ford fiesta classic diesel mileage is 32kms and that of the indicaev2 is 25kms. The state of technology has to be appreciated and encouraged.
PS: as far as SUVs are concerned, there are petrol innovas for sale which again give lesser mileage than their diesel counterparts.

Limca book of records- The maximum distance traveled in a car on a single tank of fuel was 1570.8km.The Ford Fiesta 1.4 TDCI was run from 12:40 p.m on july 29 to 5:23 p.m on july 30,2006 for a total time of of 28 hours & 43 minutes by 6 drivers of Auto car India in rotation at the track at VRDE,Ahmednagar,Maharastra.

Ford Fiesta1.4-litre Duratorq Tdci Diesel -

Record distance on a single tank of diesel = 1570.8 km

Total amount of diesel consumed = 49.89 litres

Record Mileage on a litre of diesel = 31.48 kpl



Ford Fiesta 1.4-litre Duratec Petrol -

Record distance on a single tank of petrol = 1183 km

Total amount of petrol consumed = 52.75 litres

Record mileage on a litre of petrol = 22.43 kpl

Note- the cars were always running in 5th gear at 59.7km/hr avg speed(rules mean you cannot coast in neutral),they were running over inflated tires & the ac disconnected,so guys dont expect to get anywhere close to these figures in real world conditions,all info sourced by me are from the "September 2006 Issue of Autocar India".Some car owners are a bit overzealous when calculating there mileage,we must agree our fuel gauges are not the most accurate(i feel some car owners boasting about mileage figures on there cars gives them a sense of pride always mentioning there best mileage estimates & not the bad ones) & another interesting fact the error of the fiesta diesel odo after 1570.8km of driving was 30km.Hope these facts will help you to benchmark your real world mileage figures ! Remember a Diesel fiesta needs to drive at 60km/hr(inflated tires) for approx 31 min non stop with windows rolled up & no ac to achieve this figure.

Drive safe guys!

 

[Prads]

Re: Government Raises Tax Upto 25% For Diesel Cars

If you look at the overall picture things are different. Our country produces crude and imports crude. The amount of petrol produced out of the crude is roughly in the range of 45-55% which roughly converts to 55 liters of petrol per 100 liters of crude imported or produced. This is way higher than the percentage of diesel produced from crude (about 25-29%). Thus for an economy like ours actual cost of production for diesel is considerably higher than petrol. Considering this, for every 100 liters of crude imported you can run a petrol car for 55 x 12 = 660 kilometers (55 liters x 12 km/l) whereas a diesel car can be run for 29 x 18 = 522 kilometers (29 liters x 18 km/l).
Correct me if I am wrong... These are the figures I got from a friend working in an oil company...

Hmmm that certainly is an eye opener,are you sure about this? If its true it appears so diesel is a swindling politician who everybody wants to vote for, since every one is going for a diesel car just cos its cheaper to run(& thats what everybody wants) but the economic impact is bad as a result!

My friend told me in certain gulf countries the pumps automatically change fuel prices when a camera checks if its a transport truck or a luxury suv,i was a bit skeptic but i feel something like that is needed here but knowing how petrol pumps are pretty sure that wont work either

 

[Markiv]

Re: Government Raises Tax Upto 25% For Diesel Cars

And why is that? Care to explain??



Just because you don't own an SUV and most of the SUV'S are run by politicians and goondas you can't give such blank statements buddy , justify your statement.

@cooldhaya:- I fully agree with you when you speak of the general bias against SUV/MUV Owners.

Think of it this way, the other day we went on a holiday with another family (total 4 adults, 4 small kids). taking the Innova instead of two cars, because two cars would guzzle more fuel. I also noticed almost all the SUVs/MUVs on the highway were carrying atleast 7 or 8 passengers. Aren’t they saving fuel by going in one vehicle? How are they labeled as fuel guzzlers?

Then I started to notice the usage pattern of SUVs/MUVs and normal cars in the city, believe it or not, I noticed that almost all SUVs/MUVs had an average of 3- 4 occupants while most of the cars had an average of 1-2 occupants. Thereby, the fuel consumed per person is the same.

Coming to Politicians/goondas etc, I think they are the most eco-conscious class in the country. Their vehicles are always occupied by a minimum of 7 extending sometimes upto 10-12 occupants per vehicle. (in city as well as on the highway),thereby consuming still lesser fuel per person.(like a bus).

The above usage pattern is based on observing 7/8 seater SUVs/MUVs. As far as 4/ 5 seater SUVs /MUVs are concerned(i.e bmw,audi etc), then they should be viewed in the same angle alongwith all fuel guzzling cars(i.e. camry, accord , merc etc)

Coming to the argument saying diesel is cheaper, so people tend to use it carelessly, what I have noticed is that people don’t take Innovas /Scorpios to the nearby grocery store and break their head for parking. This offence is usually committed by small diesel hatches, not by SUVs/MUVs.

@ram, quite an interesting piece of info, u got there. As you said, this is a big debatable topic with lots of angles.

 

[gears1313]

Re: Government Raises Tax Upto 25% For Diesel Cars

Very sad news for Bangaloreans going for Swift,Ritz VDI/ZDI after govt. Taxes on D cars

Ritz: LDi OTR: 6,29 Lacs ; VDi 6,54 Lacs.

Swift:LDi OTR: 6.60 L ; VDi 7.20 Lacs ; ZDI:8,10 Lacs.

Is this actually implemented or still theres some time?

 

[Vishwas]

Re: Government Raises Tax Upto 25% For Diesel Cars

Is this actually implemented or still theres some time?

Yes it is.Saw this quotation on the price list w.e.f 25th Jan from Kalyani Motors,dealer of Maruti.

 

[Umang]

Re: Government Raises Tax Upto 25% For Diesel Cars

guys not only us car makers are also opposing additional tax on diesel cars!

Car makers though, are opposed to the move of additional tax on diesel vehicles. One such manufacturer is Ford India, whose Managing Director, Michael Boneham has had this to say. Boneham says that diesel vehicles are inherently more fuel efficient than petrl vehicles, which in fact is very true. Secondly, modern diesel cars, by means of turbocharging and direct injection produce less carbon dioxide emissions than an equivalent petrol engined car. Thirdly, diesel is cheaper to import than petrol, due to the cost of production of diesel being lower than petrol.

Therefore, a policy of encouraging more petrol cars by taxing diesel cars at a higher rate will only lead to the petroleum import bill of the country rising. Also, Boneham maintains that only 1% of the total diesel used in the country reflects usage by passenger cars. All these factors point to an argument against the imposition of additional tax that the government might levy diesel engined cars and SUVs with. All said, on the other side of the argument, the contention is that passenger cars and SUVs have no business of takig advantage of the diesel subsidy, which is meant for the agriculture and transport sectors.

Therefore, the 2012 Union Budget will be more of choosing the lesser of the two evils, for the Indian Finance Minister. On which way this debate will swing and as a consequence, the direction in which diesel car prices will head is something that only time can tell. A silver lining though, is that even if the government imposes additional tax on diesel engines cars, the resale value of diesel cars, a figure that is already high currently, will only go up. Watch this space as we track the debate about additional taxes on diesel engined cars closely in the run up to the 2012 Union Budget.

source - indian carsbikes

 

[gears1313]

Re: Government Raises Tax Upto 25% For Diesel Cars

New Delhi: Ahead of presentation of Budget for 2012-13, automobile makers like Ford and Renault are raising their voice against imposition of any additional duty on diesel vehicles that has been demanded by many quarters.

As the government gets ready with the Budget, there has been speculation that higher taxes could be imposed on diesel passenger vehicles as the subsidised fuel has been diverted for personal use by the affluent.

"How can you justify taxing only one industry? It is not justified. The automobile industry is the one, which is investing heavily in the country. It is going to affect the industry negatively," Ford India President and MD Michael Boneham told reporters in New Delhi.
There has been speculation that higher taxes could be imposed on diesel passenger vehicles in the Budget.
Ford, Renault oppose additional duty on diesel cars

Ford India, which is investing Rs 4,000 crore in Gujarat to set up a new plant, also supports stand taken by the Society of Indian Automobile Manufacturers (SIAM) on the diesel taxation issue, he added.

"Only about 1 per cent of the total diesel consumptions are by personal cars. So I think, it is not a revenue generating step," Boneham said.

Expressing similar sentiments, Renault India Managing Director Marc Nassif said the company in association with its alliance Nissan has invested Rs 4,500 crore at its Chennai facility and its investments may be at risk if the government suddenly changes its policy.

"A significant part of the product portfolio consists of diesel cars and if the government is to change their policy and increase the excise or levy any other tax, then the subsequent demand may be less than what has been projected.

This will lead to a major increase in break even period or even a loss for Renault," Nassif said.

Inconsistent policies or lack of policies will act as deterrent for new players as they cannot anticipate what the playing field will be in the coming years, he added.

Similarly, homegrown auto major Mahindra & Mahindra had termed the calls for imposing additional tax on diesel vehicles as "retrograde" as any such move will only impede growth of the industry which has had a difficult year in 2011.

Earlier, SIAM had said any move to impose additional duties on diesel vehicles will "stigmatise" diesel technology which will be very unfair to the sector.

SIAM had said that out of a total of 61.68 million tonnes of diesel consumed in India across various sectors during 2010-11, diesel personal cars consumed only 1.03 per cent, while for diesel taxi segment it was at 1.82 per cent.

Jeeps used for personal purpose accounted for 0.53 per cent and the same category of vehicle used for commercial purpose consumed 3.44 per cent, it had said.

However, countering this, Centre for Science and Environment (CSE) had said as per the government's Petroleum Planning and Analysis Cell (PPAC) data, which was cited in the Planning Commission's Kirit Parikh Committee Report of 2010, the total diesel consumption by cars, jeeps, MUVs, taxis and three-wheelers stood at 15 per cent.

CSE had demanded an additional duty of up to Rs 1.62 lakh on big diesel cars to prevent the misuse of subsidised diesel for luxury.

Expressing similar views, the newly-elected President of the industry chamber Assocham Rajkumar Dhoot had said subsidies on diesel should not be offered to luxury cars, telecom towers and other industries and must be restricted only to agriculture and transport sectors.

The government should levy additional duties to luxury players, who are using subsidised diesel, he had said.

Source: Ford, Renault oppose additional duty on diesel cars - Business News - IBNLive

 

[S Class]

Re: Government Raises Tax Upto 25% For Diesel Cars

Some reports indicate that only UVs/SUvs will be levied with such tax while there won't be major change for hatch & sedans.

Btw, there is a possibility of petrol prices to be increased by Rs.3-4/L this month.

 

[Manhattanarmor]

Diesel cars shot up in last few weeks in India

Nearly 45 per cent of car sales since October have been diesel, but the capacity has been constrained. A proposed tax to the tune of Rs 80,000 is expected to be slapped on diesel cars to address the imbalance between these and the petrol versions caused by the widening price gap between the fuels. But whatever may be the consequences Diesel car does save a lot of money. What do you guys have to say on it? Let me know your views.

Regards

 

[S Class]

Re: Diesel cars shot up in last few weeks in India

Nearly 45 per cent of car sales since October have been diesel, but the capacity has been constrained. A proposed tax to the tune of Rs 80,000 is expected to be slapped on diesel cars to address the imbalance between these and the petrol versions caused by the widening price gap between the fuels. But whatever may be the consequences Diesel car does save a lot of money. What do you guys have to say on it? Let me know your views.

Regards

It depends. For eg. the price difference between Manza Aura ABS between petrol & diesel is 80k, for Verna SX, it is almost 1.5L. In such case, the recovery of price difference in Manza will be faster than Verna. Adding 80k on it would mean that the running has to be more to recover the cost. However, even in resale market, I feel diesel will get some premium.

Btw, UV/SUV will be most hit as they don't have petrol options.

 

[Crazy cat]

Re: Government Raises Tax Upto 25% For Diesel Cars

I visited a M&M showroom to check the prices of Scorpio. The SE says that the diesel duty would be 7% which would translate into 70-80k. Although, he said this to make a decision soon and promised me a immediate delivery if i book in the next week.

 

[raceace]

Re: Government Raises Tax Upto 25% For Diesel Cars

This policy of taxing the diesel cars is really absurd that is IMO , on the contrary, the Govt should calculate the taxes based on the cc of the engine, just like the excise duty. I would rather quote my own example that is , I have booked Swift ZDI. The OTR in Mumbai is around 7.2 at the time of booking. Now after this ridiculous taxing its bound to cross 8+. Now could I afford a petrol car, YES. But not the running costs. And some how those equations of lower running for petrol cars v/s the long term recovery of diesel doesn't make sense to me. The reason being petrol rates are increased almost monthly if take out the annual average. What should we common man supposed to do ?, I am not buying a car because I have a lot of money, I am buying because I want to eliminate dependencies on the public transport which is really pathetic, also for my aged parents who obviously cannot travel the way we folks can. IMO the Govt is really not favoring the Common Man :)