Budget Breather: No excise duty based hike in car and bike prices!

2011 Volkswagen Polo

Here’s some cheer to blow away all that monday morning blues. The finance minister, Mr Pranab Mukherjee has announced no bump up in excise duties which means that car prices, on account of excise duties will not go up. In other words, there has been no change in the excise duty rates for automobiles in the 2011 Indian union budget, which will serve as a respite, both for auto manufacturers as well as car and motorcycle buyers.

This bit of news, while surely being a pleasant surprise, was not expected as the entire Indian car industry was bracing up for an imminent excise duty hike, which thankfully has not happened. All said, a car price hike may still be in the offing as manufacturers are struggling to maintain profit margins with a steep increase in the input costs.

But, with the Finance Minister not effecting an excise duty hike, we’re hoping that manufacturers manage to absorb the rising input costs without effecting a price hike in the near future as the excise duty cut on steel will ease input costs to a certain extent. The coming days will unravel whether or not auto manufacturers will go ahead with a price hike. Watch this space.

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