Excise duty for small cars, scooters, motorcycles and commercial vehicles will come down to 8% from 12% while SUVs will attract excise duty of 24% as against 30% earlier
Prices of automobiles, including cars, sports utility vehicles (SUVs) and two-wheelers, are set to come down with Finance Minister P Chidambaram announcing a reduction in excise duty in the Interim Budget 2014.
“To give relief to the automobile industry, which is registering unprecedented negative growth, I propose to reduce excise duty,” Chidambaram said.
Excise duty for small cars, scooters, motorcycles and commercial vehicles will come down to 8% from 12% earlier. SUVs will attract excise duty of 24% as against 30% earlier.
Excise duty on large cars will now be 24% compared with 27% earlier, while the duty on mid-sized cars will go down to 20% from 24% previously.
The excise duty cut will be applicable up to 20 June 2014.
Annual car sales in India declined for the first time in 11 years in 2013, posting a 9.59% dip, as the auto industry reeled under a prolonged demand slump due to the economic slowdown.
According to the Society of Indian Automobile Manufacturers (SIAM), domestic car sales last year fell to 18.07 lakh units from 19.98 lakh units in the previous year.
The slump in sales continued in January as car sales fell for the fourth straight month with a decline of 7.59% to 1.60 lakh units from a year earlier.
During the December quarter Eicher Motors reported growth of 2.18 times in its net profit to Rs74.43 on robust sales driven by mainly Royal Enfield motorcycle business and higher exports
Eicher Motors, the manufacturer of commercial vehicles and iconic ‘Royal Enfield’ brand motorcycles, said its fourth quarter net profit surged 118% on 72% increase in its sales in motorcycles and 60% higher exports.
For the quarter to end-December, the automobile manufacturer said its net profit grew 118% to Rs74.43 crore from Rs34.16 crore while its total revenues, including sales, rose 78% to Rs527.88 crore from Rs296.70 crore, a year ago period.
“While the industry continues with its down trend given the Indian economic scenario, Eicher Motors has once again reported a robust financial performance, Royal Enfield has again had a fantastic year and continues to grow from strength to strength. We continue to work towards increasing our overall market share in commercial vehicles through our 50:50 joint venture with the Volvo Group -VE Commercial Vehicles Ltd,” said Siddhartha Lal, managing director and chief executive of Eicher Motors.
According to Moneylife analysis, Eicher Motors net sales growth rate for the December quarter stood at 78%, which is 13% higher than its three-quarter year-on-year growth rate of 65%. Eicher Motors operating profit growth rate stood at 208%, far higher than its three-quarter year-on-year growth rate of 132%. Eicher Motors return on net worth stood at 45% while its market capitalisation is 28 times of its operating profit.
During the fourth quarter, Eicher Motors reported growth of 72% in Royal Enfield sales with highest record sales of 55,101 units as compared to 31,968 units. Its overall exports grew 60% to 1115 units during December quarter.
However, Eicher Motor commercial vehicle business sales remain negative during the quarter due to slowdown in auto industry. Its heavy duty truck sales fell by 46% to 1,024 units, light and medium duty trucks by 35% to 4,957 units and buses by 30% to 956 units respectively. Its Volvo truck sales grew 11% to 215 units from 193 units a year ago period.
Eicher Motors during November, expanded its Royal Enfield motorcycle range by launching ‘Continental GT’ in Indian markets. During December it also launched new pro series trucks and buses.
During the 12 months to end-December 2013, FIIs shareholding in the company grew to 19.95% from 10.68% in a same period a year ago. While, domestic institutional investors (DIIs) shareholding fell to 5.15% from 13.70%, public shareholding fell to 19.78% from 20.43%. However, promoter shareholding remained at 52.12%.
Eicher Motors reserves and surplus as on 31 December 2013 stood at Rs794.30 crore, an increase of 32% than Rs602.05 crore.
The company declared a final dividend of 300% or Rs30 per share for the year ended 2013.
Eicher Motors closed Friday marginally up at Rs4,847 on the BSE, while the 30-share benchmark also ended the day marginally higher at 20,326.
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