Tata Motors, Mahindra & Mahindra Announce Price Cuts Post GST

Originally Published On BW Businessworld |

After price cuts announced by country's largest carmaker Maruti Suzuki and Toyota Kirloskar, other automakers are also passing the benefit of the Goods and Services Tax to consumers. On Wednesday (June 5), homegrown auto major Tata Motors announced a price reduction of Rs 3300 to Rs 217000 on its passenger vehicles.

Mayank Pareek, President, Passenger Vehicles Business Unit said, "Following the roll out of GST, we have decided to pass on the entire benefit to our customers. We are offering a price reduction of up to 12 per cent range between Rs 3300 and Rs 217000 depending on the model and variant. With a strong focus to encourage positive buying sentiments, we have taken this step."

Tata Motors passenger and commercial vehicles total sales (including exports) in June 2017 stood at 40,358 vehicles, lower by 9 per cent over 44,525 vehicles sold in June 2016.

Wasting no time, utility vehicle maker Mahindra and Mahindra also announced price cut across its line-up.

While M&M is yet to announce model-wise discount, on average prices of its UVs and SUVs have been reduced by 6.9 per cent, while those that come under small car segment have been reduced by an average of 1.4 per cent. Worthwhile to notice, the homegrown company is one of the major beneficiaries of GST as automaker offers both SUVs and electric vehicles in India, two segments that have received the highest tax benefits post the launch of GST.

Pawan Goenka, managing director, M&M said, "GST also benefit consumers, thus being a win-win for all. The transition to GST has been seamless for M&M."

As per the new taxation system, cars across different segments and body styles have seen a tax reduction between 1.7 per cent (all sub 4-metre vehicles) and 12 per cent (all SUVs larger than 4-metres).

Electric vehicles (EVs) which are still in a very nascent stage comes under the 12 per cent GST slab, seeing a tax drop of 7.5 per cent from the earlier 20.5 per cent.

Earlier on Monday (July 06), Ford Motor India too announced a 4.5 per cent reduction in its prices.  The company is giving a discount of Rs 2,000 on Ford Figo in Delhi and a Rs 8,000 on the compact SUV EcoSport. The SUV Endeavour will now be cheaper by Rs 1.5 lakh in Delhi while it will cost Rs 3 lakh lesser in Mumbai.

Maruti Suzuki and Toyota were the first PV carmakers to announce a price cut. While Maruti has lowered the price of up to 3 per cent, Toyota, which makes popular SUVs, is giving a price benefit of up to 13 per cent on its lineup.

PV sales in the first month of GST era are expected to touch new highs as consumers had been postponing purchase anticipating lower prices. Industry anticipates, sales to touch a new high of 3,00,000 units in July 2017.