Mahindra & Mahindra (M&M) is waiting on the government’s decision on the proposed additional tax on diesel car in the Union Budget 2012-13 to plan its future investments and capacity expansion. The company expects its sales to plummet in case the tax is imposed since 99 percent of its total volume contributed by diesel powered vehicles such as utility vehicles, multipurpose vehicles and sedans.
According to Mr. Pawan Goenka, the company plans on reducing its forecast for the 2012-13 fiscal once the additional tax on diesel cars in implemented as it expects its sales to drop for about a three month period which may take a permanent form.
The implementation of the additional excise duty on diesel cars will also affect the company’s investment and expansion plans which were based on the expectations of growth and consistency in terms of volume.