Maruti Suzuki could make a decision whether to reduce the prices or not in a day or two on the back of corporate tax rate cuts
Maruti Suzuki India Limited (MSIL) is reportedly considering the revision of prices across its domestic portfolio due to the corporate tax cuts. MSIL’s Chairman, RC Bhargava, told recently that the largest carmaker in the country is looking at a solution and thus an announcement can be expected in a day or two.
He told TOI that a decision will be made “quickly” and the brand cannot afford to wait for a month. With car prices going higher being an important factor for the sales slowdown encountered throughout this year, some manufacturers like Maruti Suzuki might consider lowering the sticker tags.
However, on the contrary, companies like Hyundai, Honda and Toyota are content with the consumer discounts and benefits on offer during the festive season. The domino effect of a vague sales year in the auto industry is high discount levels being provided across almost every segment.
The aforementioned brands think there may not be any more scope left to bring down the prices. The Vice President of Toyota Kirloskar Motor (TKM), Shekar Viswanathan, believes there might not be any immediate effect.
He reckons the lower tax rate aids in improving the flow of cash for the brands but the impact on the actual pricing of the product remains uncertain. Alternatively, the bettered cash flows could result in the funds used for R&D, incremental CSR activities, rewarding shareholders to encourage them to make fresh investment, development of products, and so on.
Honda Cars India says the existing incentives are good enough to appease the customer at this point and thus no abrupt price cuts will be implemented. Hyundai Motor India Limited, on the other hand, is looking into the matter but passing on the benefits to the customer is highly unlikely.