Maruti cuts car prices by up to Rs5,000

Mumbai: Maruti Suzuki Ltd has reduced the prices of its cars by up to Rs5,000 following a reduction in sales tax in Haryana, where the facilities of the country's biggest car maker are located.

"We have passed on the benefit of the reduction in sales tax by Haryana from 3 per cent to 2 per cent effective April 1 to dealers, who in turn have passed it on to customers," a company official said.

The reduction in sales tax would translate to a price cut in the range of Rs3,000-Rs 5,000 across various models, the official added.

Haryana had from 1 April, reduced sales tax rates from 3 per cent to 2 per cent following the reduction in central sales tax from 4 per cent to 3 per cent.

The reduction in price amidst rising interest rates would have a softening effect for the country's leading car maker, prompting people to buy cars.

Maruti Udyog managing director Jagdish Khattar, however, dismissed the interest rate effect as short-term.

MUL, meanwhile, is all set to join the `big car' league with t he launch of the SX4 next month. Other global majors like Honda, Ford and Hyundai currently dominate the mid-size sedan club.

The SX4 is likely to be priced between Rs6.5-8 lakh - the highest price tag for any Maruti car in the country till now.

The arrival of SX4 also heralds advanced engine technology, since this would be the first car to be strapped with the M-series engine.

"We are preparing ourselves for engine capability that is Euro IV and Euro V compliant and this involves heavy investments. All future models from Maruti will be equipped with the new generation of engines, since Maruti is aligning itself with parent Suzuki Motors Corp's strategy to comply with stricter emission norms. Suzuki is already producing Euro IV and V compliant engines for Europe and we are trying to run parallel to them," said Khattar.

The investment on the new engine technology would be a part of the Rs9,000 crore Suzuki has already announced for the country, he added.

The M-series, dubbed as the future of Suzuki engines, is currently being imported from Japan and assembled at Suzuki Powertrain India's facility at Manesar for SX4 sedan.

Maruti is also in the process of increasing localisation levels of the car.