Falling Car Prices: Maruti Says “Look At The Problem”, Toyota, Honda And Hyundai Say “No”
When asked if Maruti will cut retail prices, Chairman RC Bhargava said the company is “looking into the matter” and something may be announced within the next 1-2 days. âIt needs to be decided quickly, and we can’t wait a month,â Bhargava told TOI when asked if the company could lower vehicle prices.
Bhargava previously said that vehicle affordability is increasingly becoming a concern for buyers and this is one of the reasons that have depressed the car and SUV market.
However, Shekar Viswanathan, vice president of Toyota Kirloskar, said he saw no immediate impact on vehicle prices due to the government announced lower corporate tax rate. âA lower tax rate helps us improve cash flow. But is the real cost of the product going down? The answer is no. Otherwise, there is little potential to reduce the price of vehicles. ”
Viswanathan said the improved cash flow will be used for other additional activities. “The additional funds can be used for research and development, product development, additional CSR activities and to reward shareholders who will then be excited to make new investments in the country.”
Hyundai, the second-largest passenger car maker, said “passing on the price reduction benefits can be a long way” at this point. “There are multiple factors that need to be looked at from an overall profitability perspective,” said Vikas Jain, Hyundai sales manager.
Hyundai’s finance department is believed to be looking into the matter, including the implications of a price cut (if any, the company decides to do so).
Honda Cars said the current offers and incentives “are sufficient for now”, so there are no plans to reduce retail prices. âWe’re not trying to cut prices. Right now we have the best model car programs on the market, âGoel said.