Size batters: Sedans and SUVs to cost a lot more

Get ready to pay more for automobiles, especially if you are looking to upgrade to a sedan or buy an imported SUVs. There is an additonal burden on imported SUVs as the customs duty has been hiked from 60% to 75%. Excise duty on bigger bigger vehicles, or those with engines above 1500cc, has gone up by 5% to 27% from the existing 22%.
Following the announcement, sedans are set to be dearer by upwards of Rs 11,000 (for cars like Honda City and Hyundai Verna) to Rs 80,000 for premium ones like the Honda Accord.Domestic SUVs like XUV500 will see an increment of Rs 35,000 on the top-end model while an entry-luxury car like Mercedes C-Class (now Rs 30 lakh) will be dearer by about Rs 1.5 lakh.
But even smaller vehicles and two-wheelers will not get away as the excise duty has been increased from 10% to 12%. As a result, the entire spectrum of carmakers—from mainline companies like Maruti, Tata, Hyundai, Mahindra, GM, Ford and Toyota to the premium ones like BMW, Audi and Mercedes Benz—have been hit and will pass on the hike to consumers. The price increments come at a time when the industry is already facing a slowdown due to the high inflation and interest rates and general pessimistic economic situation.
While small cars are likely to get dearer by between Rs 2,500 and Rs 8,000, two-wheeler prices are likely to move up by between Rs 500 and Rs 2,000. “The increase in excise duty will hurt automobiles, especially when the industry is battling a slowdown,” Shinzo Nakanishi, MD Maruti Suzuki, said.
The Budget, however, spared a much-feared — but highly anticipated — additional duty on diesel vehicles which was being demanded by the green lobby as well as certain quarters in the government to ensure that the subsidy is not misused.While the 2% excise hike saw the overall duty on small cars like Maruti Alto, Hyundai i10, Ford Figo and Tata Indica go up from 10% to 12%, it were the bigger sedans and SUVs that came in for a steeper tax treatment.
Budget 2012
Budget News 2012