Maruti M800 and Alto, Hyundai Santro, and Tata Indica will cost a lot less from March 1, 2006.

Indian car market leader Maruti Udyog [Get Quote] on Tuesday announced a price cut ranging between Rs 13,000-22,000 across five models, including M800 and Alto, following the cut in excise duty on small cars.

"Maruti prices will reduce from tomorrow," company managing director Jagdish Khattar said, immediately after the finance minister announced that excise duty on small cars will come down by eight per cent to 16 per cent.

The price cut on the popular M800 will be around Rs 13,000, hatchback Alto by Rs 15,000, and on WagonR between Rs 15,000 and Rs 22,000, Khattar said.

"We will incur a loss of Rs 30-40 crore because of this though it would be good in the long term," Khattar said.

The other two models where prices will be cut are the Zen and Omni van.

Santro too to cost less

Minutes after Finance Minister P Chidambaram announced an eight per cent cut in excise duty on small cars, car major Hyundai today announced a Rs 23,000 cut in prices of its flagship Santro car.

"The Santro will cost Rs 23,000 less from tomorrow," Hyundai India President B V R Subbu said.

Welcoming the finance minister's announcement, he said it would give a fillip to the small car segment. "We hope that it leads to a significant growth in demand for small cars," Subbu said.

However, prices of other Hyundai models will remain unaffected, Subbu added.

. . .  and Indica

Tata Motors [Get Quote] on Tuesday said it will be reducing the prices of some of its cars, including the hatchback 'Indica,' following the reduction of excise duty on small cars.

"We will be reducing the price, though exact details are being worked out," Tata Motors vice president (passenger car business unit) Rajiv Dube said.

Following an eight per cent cut in excise duty, car majors Maruti and Hyundai India have already announced a cut in prices. While Hyundai's flagship model 'Santro' will see prices drop by Rs 23,000, Maruti has announced a price reduction between Rs 13,000-22,000 across five models, including 'M800'.

Excise cut to 16%

In a major boost to the automobile industry, the finance minister on Tuesday cut the excise duty on small cars to 16%.

Specifying the dimensions, the FM said, the car's length should not exceed 4000 mm.

It will be applicable for 1500 cc diesel cars and 1200 cc for petrol cars.In a major boost to the automobile industry, the finance minister on Tuesday cut the excise duty on small cars to 16%.

Specifying the dimensions, the FM said, the car's length should not exceed 4000 mm.

It will be applicable for 1500 cc diesel cars and 1200 cc for petrol cars.

Which cars qualify for price cuts

Finance Minister P Chidambaram has reduced the excise duty on small cars to 16%. So, which cars qualify?

1. Cars not over 4,000 mm in length - Maruti 800, Omni, Alto, Zen, Wagon R, Tata Indica, Hyndai Santro all qualify for the reduction in excise duty to 16% from 24%.

2. Diesel engines not over 1500 CC - Tata Indica, Suzuki Swift Diesel with the upcoming 1.3 Ddi engine from the new engine plant, Hyundai Getz if it gets the 1.5 litre CRDi engine will qualify.

3. Petrol engines not over 1200 CC - Hyundai Getz Petrol, Suzuki Swift Petrol, Indica Petrol, Palio Petrol, though they meet the 4000 mm restriction, has petrol engines bigger than 1200 CC displacement and will not qualify.