Auto makers to raise prices marginally

01 March 2007

Carmakers have said that they plan to raise prices marginally to offset the costs of the cess to finance secondary education. Speculation of duty cuts had led to consumers postponing their purchases till after the Budget.

The finance minister has proposed a levy of 1 per cent on all taxes to fund secondary and higher education, in addition to the existing 2 percent levy which raises funds for basic education.

Maruti Udyog Ltd. announced shortly after the budget was presented yesterday that it would not raise prices of its vehicles till 15 March. Maruti did not clarify whether the prices would be increased on all models or selectively.

Maruti had earlier raised prices on some of its models by up to Rs12,000 rupees on 1 February.

According to media reports, Tata Motors Ltd., the third-largest car maker, will raise prices by up to Rs1,200.

Pawan Goenka, president of Mahindra''s automotive unit told the media that his company.would raise prices by Rs1,000 to Rs2,000.