After M&M, Tata Motors may redesign SUVs to beat tax

Just days after auto major Mahindra and Mahindra said it will be compelled to modify its products to align with the new specifications for lower SUV duty, Tata Motors today said it may do the same.

Post the passage of the finance bill, SUVs which are above the 4-metre length, 1500cc engine along with 170mm ground clearance attract excise of 30 percent as against 27 percent earlier.

[caption id=“attachment_767497” align=“alignleft” width=“380”] Under the current definition given by the Finance Ministry for the taxation purpose, SUVs which are above the 4-metre length, 1500cc engine along with 170mm ground clearance attract excise of 30 percent as against 27 percent earlier.[/caption]

According to a _CNBC-TV18 r_eport, Tata Motors has taken on board plans to work on modify SUVs to lower their ownership costs.

The auto major’s SUV portfolio comprises of the Sumo, Safari and Aria which will attract higher excise duty. According to the report, vehicles will be designed in a manner to make them affordable for consumers entering the SUV category. The vehicles are expected to deliver on both power and performance.

Tata Motors’ market share in the UV segment stands at eight percent, while four of the ten SUVs affected by the Finance Bill belong to Tata Motors.

Initial analysis shows that industry sales of SUVs on which excise duty has been increased by 3 percent have gone down by 14 percent in April 2013 as compared to last year.