The Budget 2012 leads to hiked car prices

While the Union budget of the year 2012 did not increase any tax on the diesel cars and have continued with the generous subsidy with regards to the prices of the fuel, the announcement regarding the hiked excise duty has in turn gone on and led to the increase of prices in Cars. While the various car manufacturers have really heaved a sigh of relief since the diesel cars are not getting any more expensive they have no choice but to increase the price of both the commercial and well as the private vehicles to keep up with the increase in the excise duty.

The increase of prices in Cars is going to decrease the confidence of the customers, and can negatively impact the sale of these vehicles. This is the general opinion of the auto manufacturers. In general the price in the cars is set to increase to one or two percent in the coming times. The Indian car manufacturers such as Mahindra and Mahindra and Maruti Suzuki have seen a recent spurt in sales, especially in the pre-budget scenario. This is because more and more people were looking to buy the cars before the expected rise in prices in the coming budget. After the announcement of the budget shares of both Mahindra and Maruti have gone up.

The increase of prices in Cars have gone in effect from January where most car manufacturers such as General Motors and Hyundai have increased the prices by two percent, others like Ford and Toyota are going to go by a three percent hike. In general people are going to find it more and more difficult to buy cars at this rate and the recent spurt in the increase is going to remain no more. Cars which were considered cheap till now and within the budgetary reach of most people such as Nano and Alto are going to have increased prices too.

Finance minister have included the price hike in the recent budget in view of bridging the fiscal deficit. However this has resulted in the deceleration in the trend of buying four wheelers which had increased in the recent times. If you were developing a mindset to become a proud owner of a four-wheeler in the near future chances are you will have to postpone it for the time being, in view of the recent budget announcement and the consequent price hike.