Auto shares dip after withdrawal of excise duty cuts

M&M, Bajaj Auto, Maruti Suzuki, Hero Moro Moto and Eicher Motors have plunged between 1-2%

 

Auto shares are trading lower after the Finance Ministry has decided not to extend excise duty cuts on automobiles and consumer durables beyond Wednesday, December 31.

Battling to meet the Budget target of reining in the Centre’s fiscal deficit at 4.1 per cent of gross domestic product, the finance ministry has decided the move.

This will make these products costlier from next year. The duty cuts have hit the government’s collection by about Rs 2,500 crore a month.

The interim Budget of former finance minister P Chidambaram had reduced the excise duty on small cars, scooters, motorcycles and commercial vehicles to eight per cent from 12%. For sports utility vehicles, it was cut to 24% from 30%, for mid-sized cars, to 20% from 24% and for large cars, from 27% to 24%.

M&M, Bajaj Auto, Maruti Suzuki, Hero Moro Moto and Eicher Motors have plunged between 1-2%.