Automobile manufacturers have embraced the government’s stimulus package which includes a 4-per cent cut in the central value added tax (Cenvat) with open arms and have immediately reduced the price of their vehicles by as much as Rs 1.2 lakh. But while auto makers and have been taken care of by the package, it now appears that automobile dealers have been left out in the cold.

S P Shah, president, Federation of Automobile Dealers Associations, said, “Manufacturers have, by and large, announced decisions to pass on benefits of Cenvat reduction to the customers. However, the automobile dealers, saddled with huge inventories for 30 to 60 days, find themselves in a bind.” Unless manufacturers came forward with their own packages to compensate automobile dealers for inventories already lying at their dealerships, automobile dealers collectively might have to take a hit of Rs 500 to Rs 600 crore in clearing the existing stocks at the revised prices that might be announced by the manufacturers, he added.

India’s largest car maker Maruti Suzuki India, and others such as Hyundai Motor India Ltd (HMIL), Toyota Kirloskar Motor and Hindustan Motors slashed the prices of their various models.

Reductions range from Rs 6,593 off Maruti’s old war horse the M800 to Rs, 1,21,330 on the imported SUV, the Toyota Prado. The country’s second largest car maker Hyundai slashed the prices of all its models by up to Rs 44,792.

In the price sensitive compact car segment, price cuts range from Rs 6,600 to Rs 18,400. Among the sedans, the Hyundai Accent and the Mitsubishi Lancer will be cheaper by Rs 15,540 and Rs 25,000 respectively, while executive-class cars such as the Hyundai Sonata and the Toyota Corolla Altis will see price reduction from Rs 38,00 to Rs 40,750. Maruti’s mid-sized sedan D’zire will now be cheaper by Rs 14,699-Rs 21,784 across petrol and diesel variants and the SX4 between Rs 19,752 and Rs 23,187. The sharpest cuts can be seen in the SUV segment with price of the Outlander down by Rs 65,000, and the Montero by 1,19,000

... contd.