Excise duty cuts to be passed on: Maruti

Q&A with R C Bhargava, chairman Maruti Suzuki India ltd

The excise duty cut on cars and SUVs, announced today, has brought some cheer to vehicle manufacturers. Passenger vehicle market leader Maruti Suzuki (MSIL), whose sales remained flat (less than 1% growth in April-January period) has welcomed the duty cut. R C Bhargava, chairman of MSIL spoke to Swaraj Baggonkar on the interim budget. Edited excerpts.

 

*Was the duty cut on expected lines?

 

This was what the society of Indian Automobile Manufacturers had suggested to the ministry of heavy industries which was later suggested to the finance ministry. But I do not know the exact quantum of cut suggested by SIAM.  

 

Will all of the duty benefit be passed on to the consumers?
 

Surely the entire duty cut will be passed on to the consumer. 

 

How much of bump-up in volumes do you expect?
 

It is difficult to predict how much benefit there will be to volumes But certainly there should be a positive impact on it, but exactly how much will it be, is something which is difficult to predict. 

 

Do you think that customers will prepone their purchases as they would be apprehensive about the government's budget?
 

I think the next three months should be interesting. Till the next budget is tabled in the parliament again customers will not be sure. There might a rush to buy vehicles and take benefit of the new excise duty. 

 

Do you think the new government will retain the excise duty at these revised levels? 

I sincerely hope they should because it will be awkward for us if the duty cut remains valid for us only for three months.