Maruti cuts car prices; Santro, i10 too cheaper

CHEAPER CARS: Maruti 800 will be cheaper by Rs 6,500 while the price cut on Swift diesel will be Rs 18,030.

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Keywords: Maruti Suzuki,, Union Budget 2008

New Delhi: After Finance Minister P Chidambaram announced excise duty cuts on small cars and two-wheelers, automakers responded by slashing prices by up to Rs 19,000 on cars and Rs 2,400 on bikes.

Carmarket leader Maruti Suzuki India Ltd (MSIL), which sells six models qualifying for the excise benefit, has cut prices of its small cars in the range of Rs 6,500 (on entry-level hatch M800) to Rs 18,030 (on Swift diesel). The new prices would be applicable from Saturday.

The company sells hatchbacks M800, Alto, Wagon-R, Zen Estilo, Swift and Omni, which are classified as small cars and fall under the lower excise duty structure.

Hyundai Motor India reduce prices of various models by up to Rs 19,419 while General Motors announced price cut on small cars by up to Rs 14,000.

"We have decided to pass on the benefit of the excise duty cut to customers on three models, Santro, i10 and the Getz effective immediately," a Hyundai official said.

The price cut on Santro could be between Rs 8,730 and Rs 13,278, while that on Getz would be between Rs 13,169 and Rs 19,419. The price cut on the newly-launched i10 would be between Rs 11,047 and Rs 16,324, the official added.

General Motors is also cutting the prices of its small cars Spark and Aveo U-VA. "We will be cutting the prices of our small cars between Rs 7,500 and Rs 14,000," GM India Vice-President P Balendran said.

India's largest two-wheeler maker Hero Honda also reduced the prices in a range of Rs 1,000 to Rs 2,400 across its various models effective Saturday. Its largest selling model Splendor will see a reduction of about Rs 1,300.

"We are passing on the complete excise reduction benefit to the customer despite the fact that in the past few weeks, the prices of raw material such as aluminium and steel have risen," Hero Honda Managing Director Pawan Munjal said.

The government has reduced excise duty on small cars and two and three-wheelers to 12 per cent from the previous 16 per cent while a similar reduction has also been announced on bus and bus chassis.

Passenger cars with length up to 4,000 mm and powered by less than 1.2 litre petrol engine or 1.5 litre diesel engine are classified as small cars by the Finance Minister. Government levies a duty of 24 per cent on cars that exceed these specifications.

Honda Motorcycle and Scooter India said that it was still evaluating the quantum of price cut, which could be in the range of Rs 1,000 to Rs 1,700. Tata Motors said it would reduce the prices of its small cars, commercial vehicles, buses and bus chassis but had not decided on the quantum of reduction.