New Delhi: In what may come as a brief relief to the auto sector, which has been witnessing one of its major slowdowns this year, Maruti Suzuki India has announced price cuts on select models by Rs 5,000 from September 25. This comes after finance minister Nirmala Sitharaman announced a corporate tax cut last week. Also Read - India’s Corporate Tax Now Competitive, Will Attract Higher Investment: RBI Governor
Alto 800, Alto K10, Swift Diesel, Celerio, Baleno Diesel, Ignis, Dzire Diesel, Tour S Diesel, Vitara Brezza and S-cross will become cheaper by Rs 5,000 from today. Also Read - 'Win-win For 130 Crore Indians', PM Modi Lauds Corporate Tax Cut Announcement, Calls The Move 'Historic'
This reduction of price will be over and above the current promotional offers, the company said in its statement. Also Read - Maruti Suzuki Offers Discounts Upto Rs 1.05 Lakh on Cars - Vitara Brezza, Swift, Dzire, Eeco | Full Details
The sales of passenger vehicles fell for the tenth straight month in August by 32 per cent. Finance Minister Nirmala Sitharaman on Friday announced to reduce the corporate tax rate to 22 per cent from 30 per cent. For new manufacturing companies, it has been cut down to 15 per cent from 25 per cent.
Reacting to the corporate tax cut announcement, Maruti Suzuki chairman RC Bhargava had said that this would be a shot in the arm as it is directly correlated to economic growth. “It will promote investment, help sustain profitability during challenging times and should also improve buying sentiments, thus helping the auto sector in the long term,” he said to agencies.
With today’s decision, Maruti becomes the first company to pass on the corporate tax cut benefit to its customers. However, it will not ease the situation in the long term as it will not spur demand.
In August, Maruti Suzuki India had reported a seventh consecutive monthly sales decline with the numbers falling 32.7 per cent to 1,06,413 units in August. According to reports, its domestic passenger vehicle sales declined 36.1 per cent to 93,173 units. With the festive season approaching and the lowering of prices, sales are expected to go up.
Domestic sales of passenger vehicles fell 31.6 per cent year-on-year to 196,524 units in August, according to the data released by the Society of Indian Automobile Manufacturers (Siam). The industry has been demanding a GST rate cut from the current peak rate of 28 per cent.