The Budget has failed to bring any reason to rejoice for the automobile industry with no reduction in excise duties. Also, there would be a cost impact on the inputs of the auto industry as a result of the non-modvatable duty imposed in the Union budget 2000-01, but it may not translate into a price hike. The actual impact will say with time. The industry as a whole will be adversely hit by the new excise structure. The non-modvatable component of the excise duty stands increased for all categories of vehicles, which may adversely impact the prices, and is likely to indirectly hit the auto component industry. There would be no impact on the passenger car industry with excise duty remaining at 40 per cent (16 plus 24). The multi-utility vehicles would however be adversely affected with the increase in excise duty from 30 per cent to 32 per cent. On the whole, the Budget is neutral for the auto component industry and negative for the automotive industry in general. |
