Budget 2008 & Automobiles Industry:Cars & Two wheeler gets cheaper.

Budget in Brief for Automobiles in India
India's government cut taxes on small cars and motorcycles to accelerate demand in the world's second- fastest growing major economy.

The finance minister, in the budget for the fiscal year 2008/09, cut excise duties on small cars, as well as buses and chassis, to 12 percent from 16 percent.

He also cut duty on hybrid cars to 14 percent from 24 percent and on two- and three-whee Finance Minister Palaniappan Chidambaram said in New Delhi today while unveiling his budget proposals for the fiscal year starting April 1. The new taxes take effect immediately.

India's motorcycle and scooter sales declined 8 percent between April and January to 6.1 million units, according to the Society of Indian Automobile Manufacturers. So it will help it.

Auto Industry's Views on Budget
The view of Auto Industries are rather mixed on this budget. As this will surely help to lower the prices of small cars but it is no gain for high end cars or luxury cars. It will further increase the gap between small and big cars. Also they said that they could have done better by working on exports and some thing for big cars.

Honda Siel Car India which is planning to launch its hybrid Civic later this year, would benefit little from the excise cut as there were very little components which gain from the excise cut.

Immediate effect and price cut by various manufacturers
As per Govt.'s excise cut, already many automobiles manufacturers announced price cut in their various models.

Maruti Suzuki cut prices for all six models that qualify for the lower excise benefit. Reductions range from 6,500 rupees for the Maruti 800 model to 18,030 rupees for the diesel-powered Swift hatchbacks.

Hyundai Motor India Ltd, a unit of Hyundai Motor said it will cut the price of its Santro model by up to 13,278 rupees and the price of its i10 model by up to 16,324 rupees.

Tata Motors Ltd., India's biggest truckmaker, said it will cut prices of small cars and commercial vehicles in a few days.