BUDGET IMPACT: Imported car prices to shoot up

Prices of cars that are imported as completely built units (CBU) are likely to go up by Rs 3 lakh-Rs 10 lakh, following the imposition of a counterveiling duty (CVD) of 4 per cent on imported cars.

The list of cars include Mercedes-Benz S-Class, M-Class, Porsche Cayenne and Bentley Continental Flying Spur.

Excutives in DaimlerChrysler India said the imposition of CVD would scale up the net customs duty on imported cars to 112 per cent from the existing 104 per cent. It would force the companies to increase prices, they added, without indicating the amount of the expected rise.

A spokesperson for Navnit Motors, the dealer of BMW cars in Mumbai, confirmed the imminent rise in BMW prices in India.

However, prices of cars manufactured or assembled locally will come down, as the peak customs duty has been brought down to 12.5 per cent from 15 per cent. Therefore, prices of models like Mercedes-Benz C Class and Skoda Octavia are expected to come down.

Honda Siel Cars India has announced a price reduction in Honda City in the range of Rs 2,000 to Rs 10,000 and Accord prices by Rs 15,000. General Motors India have reduced the prices of all models of Chevrolet Optra by Rs 20,000.

The reduction of excise duty for small cars (having a length of 4 metre and engine capacity of 1200 cc (petrol) and 1,500 cc (diesel)) to 8 per cent from 16 per cent has made small car manufacturers like Maruti, Tata Motors and Hyundai happy.

Beginning from today, Tata Motors has cut the prices of its Indica diesel models by Rs 17,000-Rs 22,500 and Indica petrol by 17,000-Rs 23,550. Maruti has cut prices by Rs 12,000-Rs 25,000. Korea's Hyundai Motors said it would cut the price of its hatchback Santro by Rs 23,000.