Following the 4 per cent reduction in the Central Value-Added Tax (CENVAT) announced by the government, car companies are all set to slash car prices by 3-4 per cent. Maruti Suzuki was the first to announce a price cut. The company’s largest selling model, the Alto, will now be cheaper by Rs 8,000. Maruti’s Chairman R. C. Bhargava said that the reduction in prices will be over and above the other discounts that car companies are already offering to increase sales.
Tata Motors, Mahindra and Hyundai too have decided to pass on the benefit to the consumer but haven’t yet worked out the quantum of relief to be offered. Toyota Kirloskar Motor (TKM) which was to hike car prices in January may now reconsider its decision.