Maruti Suzuki has recently got the benefit of lower taxes for the new model of its Swift car. The company will save around Rs 40,000 per car thanks to a lower excise duty for the new Swift’s smaller engine.
The smaller 1.2 L engine attracts an 8% excise duty, 12% lower than that of the phased-out 1.3L version. Cars under 4 metres with 1.2-litre petrol engines and 1.5-litre diesel engines attract an 8% excise duty while other passenger vehicles are taxed at 20%.
Traditionally, car makers pass on these benefits to customers in the form of reduced prices. But Maruti has decided to keep the price of the base model of the Swift same i.e about Rs. 4 lakhs.
Maruti attributes this decision to the rise in commodity prices and the cost of the new petrol engine. However, industry experts say that Maruti has taken this step keeping in view the upcoming launches in the premium hatchback segment by rival companies such as the Ford Figo, VW Polo & Toyota Etios. At that stage, Maruti will attract the customers towards the Swift by lowering prices. Swift has been the leader in its segment ahead of hatches like the Honda Jazz, Hyundai i20, Fiat Punto & the Skoda Fabia since its launch in 2005.