Price Reduction Considered By Maruti Suzuki After Corporate Tax Reduction

by Mohammed Burman | 25/09/2019
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Maruti Suzuki is considering reducing prices across its domestic portfolio after corporate tax rate decrease.

Maruti Suzuki is reported to considering reducing the prices across its domestic portfolio in India following the corporate decrease. RC Bhargava, Chairman of Maruti Suzuki India Limited recently remarked that the company is searching for a solution and an announcement will be made quickly, in one or two days. With high car prices being a contributory factor to the sales slowdown throughout this year, several automakers like Maruti Suzuki are considering reducing the price tags.

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Maruti Suzuki is considering a price cut across all their domestic portfolio in India after the corporate tax rates cut.

Also readWhy Maruti Suzuki is the most reliable automaker in India?

On the other hand, some brands like Toyota, Honda and Hyundai are satisfied with the discounts and benefits offered in the festive season. The slump in the whole Indian auto industry this year is leading to massive discount levels offered across almost all car segments. These companies think that there might be no room for any reduction in their car price tags.

Shekar Viswanathan, Toyota Kirloskar Motor (TKM)’s Vice President believes that instead of impacting the price list of the products, reduced tax rates help improve the cash flows for the car companies. The improved cash flows would generate more funds to be used for incremental CSR activities, R&D, products development and honouring shareholders to incentivize them to make fresh investment, etc.

Honda Cars India reports that the current discounts and benefits are good enough to incentivize their customers; therefore, no immediate price reduction will be conducted. Hyundai Motor India Limited is examining the matter but the company is highly unlikely to implement any price cut in their domestic portfolio in India.

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