The news for the Auto Industry is mostly good and arguably bad.
Good because the fears of the duty hike on Diesel vehicles have proven unfounded and the technology led intervention pricing towards fuel conservation and environment friendly small vehicles continues.
Arguably bad, because there is an across the board hike in excise duty from 10 to 12 per cent, the impact of which on price increase will be marginal.
The share prices of Auto manufacturers Tata Motors, Mahindra & Mahindra, and Maruti Suzuki have all since registered an upward trend given the budget direction.
February car sales had seen a steep spike especially in Diesel vehicles before the budget.
This has however proven a mistake in posterity, as neither have the prices of Diesel been increased, nor has the Government imposed a Diesel cess or tax demanded by Oil Marketing companies and environmental groups, proposed to the tune of Rs. 81,000 on diesel cars.
This will on the one hand see a continuation of the trend of increased sales in the last few years towards Diesel cars, Mini SUVs, SUVs and the lately popular crossovers, and on the other hand be a positive trigger for the investment plans by auto manufacturers. The apprehension of a Diesel Tax had put an eclipse on the investment environment of new plants to meet the surging Diesel vehicle demand until the policy flip flops over diesel were resolved.
Now what this means for the car buying consumer in terms of price is that Excise duty on small cars under 4 meters in length with petrol engine capacity of below 1200CC or Diesel engine capacity of below 1500CC will fall attract an excise duty increase of 10 to 12 per cent. The Maruti small cars like Alto, Swift, the Hyundai i10, and Honda Brio will get very marginally pricier.