Puzzle over Indica price cut

Launched in this year8217;s Auto Expo, the Indica Xeta is powered by a 1396cc engine, which clearly disqualifies it from the benefits of the excise duty cut. The finance minister in his Union Budget speech had defined small cars as those with a displacement of less than 1200cc for petrol and 1500cc for diesel.

To be sure, Indica8217;s diesel model8212;with a similar engine configuration8212; clearly benefits from the duty cut. While nobody from Tata could be contacted as most of the company officials were away for the Geneva Motor Show, the move has got the industry perplexed.

8216;8216;A smaller cut could have been justified citing benefit of the customs duty reduction. But a cut of this magnitude and that too when it does not qualify for the excise benefit is perplexing,8217;8217; said an industry insider.

In the absence of any clarification, it seems Tata did not want to be left out while announcing the price cuts. 8216;8216;The cut in Customs duty from 15 to 12.5 per cent could be the only reason. Otherwise it is very confusing,8217;8217; said India Infoline Research Analyst Amar Ambani.

That8217;s because the import content in Indica is almost negligible.

Meanwhile, Maruti today slashed prices of Baleno by Rs 8000 citing reduced costs on its imports.