Budget 2013: Prices of SUVs like Mahindra's XUV 500, Scorpio, Toyota Innova could increase by up to Rs 60,000

 Super rich cars Aston Martins may cost Rs 1 crore more while Harley Davidson price may go up by Rs 1.75 lakh.


Super rich cars such as Aston Martin and Lamborghini and sports utility vehicles like Mahindra's XUV 500, Scorpio and Toyota Innova have become more expensive after the Budget announced a hike in customs and excise duties. 

Finance minister P Chidambaram increased excise duty on sports utility vehicles to 30% from 27%. "Space occupied' was the reason to tax SUVs," Anand Mahindra tweeted. 

"And yet, larger, more luxurious sedans are exempt. Neither an equitable nor an inclusive rule..." "The 3% increase in excise duty for SUVs came as a surprise. It will certainly have a dampening effect on the industry. 

While the tax in itself is a concern, what I am perplexed about is the criterion for ground clearance. I fail to understand why a higher ground clearance is a demerit!" says Pawan Goenka, president, automotive and farm equipment sector at Mahindra & Mahindra. 

This excise hike applies to all vehicles that carry 1500cc engines (both petrol and diesel), are over 4 m in length and have a ground clearance of 170 mm. It may include variants of sedans like 
Maruti SX4 (petrol) and Honda Civic. SUV prices could increase by Rs 20,000 to Rs 60,000. 

"Instead of giving sops to the auto industry to boost growth, the Budget has increased rates," says Kasturilal Wasan, dealer for Toyota, Ford and Tata Motor vehicles. The SUV segment has been the bright spot in the auto industry, which is in the throes of a slowdown. 

Superbikes and top cars were not spared either. Import duty on fully built cars went up to 100% from 75% and motorcycles above 800 cc to 75% from 60%. The
Porsche 911 will see prices go up by Rs 28.75 lakh to Rs 72.25 lakh, if the duty hike is passed on to customers. The Harley Davidson FXD, which retails in the Rs 10 lakh-Rs 12 lakh range, will see prices go up by Rs 1.5 lakh to Rs 1.75 lakh. 

"The Budget is negative for the auto sector," says Michael Perschke, head, 
Audi India. "Over the past two years, absolute duties have gone up by over 67%," adds Pavan Shetty, head, Lamborghini India. 

The swanky Aston Martin may see a price increase of Rs 45 lakh to Rs 1 crore. "As per the WTO agreement, customs duty was expected to progressively come down from 80% to 60%. Instead, it has gone up to 100%. This is a blow for us," says Sharad Kachalia, a Rolls Royce dealer in Mumbai.