61891
Diesel vehicle tax to hit investment: Mahindra
Posted on 07 Jun 20124,806 Views Comments
Plans to set-up new manufacturing facility may have to be scrapped if tax takes effect, says Goenka
Mahindra & Mahindra (M&M), the country's biggest utility vehicle maker, on June 6,2012 said it will have to put off investment decisions worth Rs 4,000 crore for a new plant if the government slaps a hefty special additional tax on diesel vehicles, a demand made by the petroleum ministry and currently being considered by the finance ministry. “The ‘policy uncertainty’ on diesel is affecting new investment plans and making India an unattractive destination for fresh investment by auto companies”, Pawan Goenka, president of M&M's automotive division, said.
Goenka, who was here to meet finance ministry officials as part of a delegation of industry body Society of Indian Automobile Manufacturers (SIAM), said any additional duty on diesel vehicles has the potential to slow down demand and distort growth projections. Companies in the automobile sector decide on investment plans based on certain growth assumptions, he said. "If the government comes up with a sudden additional duty on diesel vehicles - even when this was not done in the Budget in March - we have to downwardly revise our growth forecast. If this happens , then investments will certainly come down."
Demand for diesel vehicles have been surging, propped by the huge price differential between the retail price of petrol and diesel. While the government has deregulated petrol and increased its price at regular intervals, it has not done so in the case of diesel, which still enjoys a subsidy. M&M had earlier earmarked an investment of Rs 4,000 crore for a new plant for which the company is talking to various state governments, including Tamil Nadu and Maharashtra . Goenka said the new investment plan was decided considering that the company's sales will grow at a rate of 20-25 % till the middle of 2014.
Do you like this story?
Readers' opinions ( 0 )
Post a Comment
Post a CommentMahindra plans strategies to avoid additional excise duty on SUVs
by ET Photography: Kunal Khadse
Mahindra may make some of its models meet any of...
Mahindra Pick up sales figure crosses 1 lakh mark
Mahindra Group revealed that its sales grew over...
Mahindra Verito Electric on the cards
by Rahul Basu Photography : Kunal Khadse
The battery pack on the Mahindra Verito electric...
Chevrolet Enjoy : Special Coverage
Designed to take on everything from the Maruti Suzuki Ertiga to the Toyota Innova the Enjoy is...
Volkswagen XL1 : Special Coverage
The Volkswagen XL1 is a production ready technological masterpiece that showcases how efficient yet...
