The hike in the excise duty, which is been included in the union budget 2012 will surely result in the two wheeler prices to go higher. The basic excise duty has been hiked from the 10% to 12% in union Budget 2012. Many two wheeler manufacturers have passed this excise duty hike to end customer as they are already facing high input cost pressure with an immediate effect.
Manufacturers also fear that new hike will slowdown the growth in two wheeler segment which has been already tapered in recent months. HMSI has already increased its Activa model price by Rs. 826-996. Similarly the motorcycles prices have also been increased in the range of Rs. 883 to 3,400 by HMSI.
TVS Motors has also follow the same path of HMSI and confirmed that it will increase its two wheeler prices with respect to hike in excise duty. The scooter range will see rise of Rs. 780 to 900 while the motorcycle range will see price hike of Rs. 780 to 1,580.
Bajaj Auto and Hero Motocorp, have still not decided anything. But, it seems that the both the company will also follow the suit and will increase two wheeler prices. The increase in excise duty of 2% was expected as the government reduced it to 8% from 12% in 2009 due to stimulus package.
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