The Indian government is still contemplating whether to increase the excise duty on diesel run cars or not. If the decision to raise taxes is taken then the cost of diesel cars is bound to become higher by Rs. 80,000. According to Michael Boneham, President and Managing Director, Ford India, increasing taxes on diesel cars may not be such a good decision. Instead of raising the excise duty, the government should increase the diesel fuel prices in order to earn extra revenue, he added.
Michael Boneham also said that since the interest rates are rising, additional taxes would be an extra burden on the customers, which would be a bad idea. Moreover, even if the decision to raise diesel fuel prices by even 0.75 paisa per litre is taken, it would still generate the same amount of revenue for the Indian government.
Ford India, a wholly owned subsidiary of Ford Motor Company, has around 45 dealership stores in about 35 cities. As per Boneham, Ford has plans to increase its diesel engine manufacturing facility that is expected to be completed by April. The company has put in 72 million U.S. dollars to expand its production capacity from 250,000 units to 340,000 units per year.
Ford India has been delaying the official launch of its EcoSport Sports Utility Vehicle (SUV) as it is still waiting for the government’s decision on diesel cars. Reportedly, the government has proposed higher taxes on SUVs than smaller cars, which will affect the car’s cost.
