Friday, 3 May 2013

Mahindra plans to tackle SUV excise duty hike

The last year was the year of Utility Vehicles, whereas a slowdown in the market was seen for all other segments of vehicles, Utility Vehicles was one which showed 52% growth. In the recent budget, excise duty was hiked for SUV's from earlier 27% to 30%. The criteria for consideration of SUV was -

  • Engine capacity greater than 1,500 cc
  • Ground clearance greater than 170mm
  • Length greater than 4,000 mm
In case any of the vehicles which does not follow even a single out of the three conditions, it will be eligible to have excise duty of 27% and only those which fulfill all three conditions will have excise duty of 30%. 

Renault's Duster being Mahindra's major competitor as of now, has engine capacity of 1,461cc and was therefore exempted from excise duty hike. On the other hand, Mahindra's Scorpio and XUV5OO fulfilled all three conditions and hence came under the bracket of 30%

However, the homegrown automaker tried to convince our Finance minister alot but all in vain. Mahindra's have now decided to work upon themselves rather than trying it through government route. In a recent interview with CNBC TV-18, Dr. Pawan Goenka, President, automotive sector, Mahindra, has revealed that company is working on “redefining” its existing models to escape additional excise hike.

Dr. Goenka mentioned that the engine capacity under the hoods of some of variants could be reduced and the cap would be done at 1,500cc. He probably was mentioning to Quanto's 1.5L 3 cylinder Diesel engine. 

Even though the ground clearance factor is very crucial to tackle Indian roads, Mr. Pawan Goenka said that measures would be taken to stick with the 170mm ground clearance rule.

However he was quick to point out that not all Mahindra SUVs could escape the duty hike. He also expressed his disappointment that the SUVs are singled out by the Union Budget


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