Excise cuts to make cars, two-wheelers cheaper

Chennai: Cars and two-wheelers are expected to become cheaper with Finance Minister P Chidambaram on Friday giving handsome excise concessions to the Indian automotive industry in his budget for 2008-09.

Chidambaram has cut the excise duty on bus chassis, small cars, two-and-three-wheelers from 16 per cent to 12 per cent.

In the case of hybrid cars, excise duty has been brought down to 14 per cent from the current 24 per cent, a drastic cut of 10 per cent.

The government's move brings great relief to two-wheeler manufacturers suffering from slow growth.

Companies like TVS Motor, Bajaj Auto, Hero Honda, Kinetic, Yamaha and Piaggio would be the gainers.

With Tata Motors launching its small wonder, Nano, and planning huge volumes, the cut in excise duty is expected to benefit the company in a large way.

Tata Motors would also benefit from the reduction in excise duty on bus chassis as would Ashok Leyland and Eicher.

According to Executive Director of Ashok Leyland, K Sridharan, "The budget is good for the auto industry. The excise duty reduction will be passed on to the customers."

The other car manufacturers who would benefit the most are Maruti Suzuki Limited, Hyundai Motors, Ford and General Motors.