CHENNAI: The effects of the Goods and Services Tax (GST) rate on automobile segments have already resulted in a spate of price cuts by automobile manufacturers, particularly in the luxury car segment. The latest of the lot, Ford, announced on Monday that it would offer discounts up to Rs 30,000 on compact sedan Aspire and hatchback Figo by passing on the benefit gained through implementation of GST in July.
Earlier, Mercedes Benz, Audi, Jaguar, BMW and Isuzu had announced price cuts in select models that benefit from a lower tax incidence through GST.
“We are happy to pass on the expected benefits of GST ahead of its actual implementation,” Ford India V-P Sales Vinay Raina said on Monday.
Mercedes-Benz India MD & CEO Roland Folger termed it a customer-centric initiative. “We have decided to pass on the GST tax benefits at an earlier stage at our cost. This approach will benefit the customers who want to purchase a locally produced Mercedes-Benz from now on and during the month of June.”
Experts say the ongoing trend was only expected, since most manufacturers had announced their intentions to pass on GST benefits to customers earlier. However, the primary impact of the GST could come from the tax increase for small cars.
“The larger impact from GST to automobile customers will only be known when small car makers like Maruti Suzuki and Hyundai announce how much of a price hike GST will bring, since small cars will be taxed higher from July 1,” said a senior automobile industry official.
Some cars will cost less. Ford is offering a discount on EcoSport of Rs 20,000-30,000. Figo and Aspire will be cheaper by Rs 10,000-25,000 depending on variant. Audi has slashed prices of its models by up to Rs 10 lakh till June 30 and BMW has stated that it is offering “benefits up to 12 per cent” on ex-showroom prices.