Stimulus effect: Car companies cut prices across models

Chennai: A day after the government announced four percent cut in central value-added tax (Cenvat), auto majors in the country, including market leader Maruti Suzuki India, Monday slashed prices of their vehicles to pass on the benefit to consumers.

Maruti Suzuki said in a statement that the price of its top-end SX4 sedan will go down by Rs 23,000 to Rs 760,542, while the small car Maruti-800 will be cheaper by Rs 6,500 at Rs 193,561.

The company added that all its 11 car models will be cheaper "immediately".

Hyundai Motor India and Toyota Kirloskar Motor have also announced price cuts.

Hyundai Motor, the second largest car maker in the country, has cut the prices of its flagship model Santro (GL) by Rs.8,834 (non AC), while the top-end luxury car Sonata will see a drop of Rs.44,792.

The company's new sensation i10 will be cheaper by Rs.11,247 and Rs.18,381 depending on its models.

According to an official, the discounts/offers announced by the company earlier will continue till December 15 this year.

A few days back the company had announced a discounted price of Rs.299,000 for its Santro (GL) model, and offered free insurance and accessories on some of its models to boost sales in a depressed market.

Toyota Kirloskar said the price of its popular multi-purpose vehicle would be reduced by up to Rs.32,780, while high-end models like Corolla would be cheaper by Rs.40,750.

"As a responsible corporate citizen, we feel this will stimulate the market by making our cars more affordable to the Indian customer. We are also positive about the recently reduced repo rates by the government, which should reduce interest costs for banks," said deputy managing director in charge of marketing Sandeep Singh.

Industry body Society of Indian Automobile Manufacturers (SIAM) Sunday welcomed the monetary and fiscal measures taken by the government to pump prime the economy.

SIAM vice-president Pawan Goenka, also president of automotive division of Mahindra and Mahindra, said: "We will definitely pass on all benefits to the consumers."