Finance minister P. Chidambaram’s proposal of a cut in excise duty for small cars left the top three Indian car manufacturers smiling, while other MNCs were left complaining of a wider cross-section of cars to be brought under the duty benefit regime.
Reacting to the duty cut from 24 per cent to 16 per cent, Maruti Udyog Ltd and Hyundai Motors India slashed prices for cars while Tata Motors said prices will be cut from March 1 and the finer details were being worked out.
As the industry had been pitching for a moderate excise duty regime, top industry players as expected were bullish on the growth of the car sector in India and immediately the markets took a liking to the FM’s announcement. Shares in Tata Motors rose nearly 4 per cent to an all-time high of Rs 816 whereas Maruti was up 6 per cent to a record Rs 834.20.
Hyundai Motors India president B.V.R. Subbu told this newspaper from Chennai, "The Budget will augur well for the auto sector. The sector has arrived but needs to do more on quality fronts."
According to Mr Subbu, any company which exports 100,000 cars has attained global cost competency levels and Hyundai alongwith some of its competition have surpassed that figure. On the prospects of India emerging a hub for small car manufacturing, Mr Subbu added, "The necessary conditions exist right now for India turning out as a small car hub but some impediments still exist such as the highhandedness of ports and roads to name a few."
Reacting to the duty cut from 24 per cent to 16 per cent, Maruti Udyog Ltd and Hyundai Motors India slashed prices for cars while Tata Motors said prices will be cut from March 1 and the finer details were being worked out.
As the industry had been pitching for a moderate excise duty regime, top industry players as expected were bullish on the growth of the car sector in India and immediately the markets took a liking to the FM’s announcement. Shares in Tata Motors rose nearly 4 per cent to an all-time high of Rs 816 whereas Maruti was up 6 per cent to a record Rs 834.20.
Hyundai Motors India president B.V.R. Subbu told this newspaper from Chennai, "The Budget will augur well for the auto sector. The sector has arrived but needs to do more on quality fronts."
According to Mr Subbu, any company which exports 100,000 cars has attained global cost competency levels and Hyundai alongwith some of its competition have surpassed that figure. On the prospects of India emerging a hub for small car manufacturing, Mr Subbu added, "The necessary conditions exist right now for India turning out as a small car hub but some impediments still exist such as the highhandedness of ports and roads to name a few."