8% excise attracts automobile players in India
Source: IRIS (10 July 2006)
Finance Minister P Chidambaram`s announcement of an excise cut on small cars from 24% to 8%, has attracted car makers from all over the globe to India to launch products or to set up plants, report agency sources.
Hyundai Motor India is planning to expand its compact car segment (below Rs 3.5 lakh) and will launch a mini-passenger vehicle by the end of 2007. Hyundai Motors Vice President, Sales and Marketing, Arvind Saxena said that this excise cut would enable them to leverage the small car market which occupies 60-70 per cent of the total car market and is estimated to grow by 10 percent this year.
With this tax cut, General Motors, is entering into the mini-vehicle space with its plans of lauching `Spark` by 2007.
Japan`s Honda Motor company is looking to set up a manufacturing hub in India along with plans of lauching new model.
As far as Indian car makers are concerned, Tata Motors has the Rs 1 lakh car project, which is expected to be completed in early 2008.
Tata Group Chiarman, Ratan Tata, is also planning to set up manufacturing plants for the `people`s car` in West Bengal, Uttaranchal and Punjab. This will create a new market space for the low and middle class income groups
Most upcoming small cars in India are planned primarily for the premium segment, thus restricting the choices for the mass consumers in the low to mid segments.
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