Tata Motors has announced that it will be reducing prices across its passenger and sports vehicle lines from Tuesday. This announcement has come close on the heels of a decision on the part of the Indian Finance Minister to reduce the excise cost on automobiles in the coming financial year. Tata’s own price reductions are expected to continue until the end of June.
India’s largest auto manufacturer Tata Motors are known for owning a number of internationally renowned subsidiaries, including Jaguar Land Rover and Tata Daewoo. They also have joint ventures with Hitachi and Fiat, among others. As one of the world’s largest car manufacturers, they are well known for producing a wide range of high quality vehicles including both passenger and commercial vehicles. In 2008, Tata Motors made headline news by launching the Tata Nano, which was at that time the world’s most inexpensive car. From their latest price reductions it looks like Tata are intent on maintaining their reputation for producing cheap cars for their customers.
Stock Prices Remain Stable
Tata Motors continues to be one of the largest and best loved automobile manufacturers in the world. Their stock prices reflect this, having remained steady throughout the year 2013-14. According to Samachar, the latest book value of Tata Motors is Rs 59.47 per share, with the cost of shares recently rising by 4% to an all-time high of Rs 816.
Cuts Across the Board
Tata Motors aren’t the only automobile manufacturer to have proposed a price reduction across certain models. According to the New Indian Express, Audi and General Motors have also revealed plans to cut prices, and Maruti Suzuki and Hyundai are expected to follow in their footsteps.
Excise Cuts Aid Consumers
Tata’s price reductions may not have happened without the preceding reductions in the excise duty. Nevertheless, this move has allowed the car manufacturer to take advantage of the current climate to pass these reductions on to their customers, in the form of savings. The excise duty reductions include a drop of 4% for small vehicles, motorcycles and commercial vehicles, and 6% for SUVs.
Price Cuts to Boost Industry
It’s no secret that the automobile industry has experienced a slump in recent years. Consumers have been increasingly finding it difficult to afford new cars; this can be attributed to both the cost of a new vehicle and the ongoing costs of running a vehicle.
Ongoing costs may include anything from insurance to repairs. To alleviate the financial burden of running a vehicle, many consumers have turned instead to the used car market, and many have opted to perform their own vehicle repairs using parts from Your Car Parts or other reputable retailers. Nevertheless, given the choice, many consumers would prefer to be able to afford a new vehicle, and the Tata’s price cut announcement will be gladly received by these people.