Customer's the king as small car prices fall

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Keywords: Union Budget 2008, Small car

Mumbai: Even as the compounded benefits from the Union Budget are being analysed, car manufacturers have already announced a reduction in their small car prices.

The reduction in the prices is a result of Finance Minister P Chidambaram's announcement of lowering the excise duty of small cars.

A four per cent cut on the excise for small cars is just one of the initiatives and populous steps taken by Chidambaram in the Budget.

As a result, car manufacturers like Hyundai, Maruti and Tata's have already announced price cut on small cars.

"We have reduced prices as a conscious decision to shift the advantage arising from the latest budget to the consumer," a Tata Motors official said.

The initiative has definitely brought a smile on the face of 25-year-old Shardul Sonawane.

Already having short-listed his budget car, he's glad to now get his dream machine at a much cheaper price than earlier.

"I'd initially done a hurried booking considering a price hike post-Budget but am I glad that the prices have come down? In fact, my dealer's also agreed to give me the price as on delivery," says Sonawane.

After Chidambaram's announcement a person buying a Maruti Swift, can have it cheaper by up to Rs 18,000 and a Hyundai i10, will be cheaper by Rs 13,000.

But the true differential is the rising parity between small and large cars that are now 12 per cent more expensive.

And even as consumers rejoice on this latest price reduction, what truly might be affected could be the demand for larger cars.