In response to a slowdown in vehicle sales in India, prompted by high interest rates, the Indian government is considering lowering the excise duty on larger cars, to make it the same as small cars.

According to the New Delhi-based Financial Express newspaper, the government is considering reducing the excise duty from 24% to 16%. The duty on small cars was reduced to 16% earlier this year.

Cars affected by the change would include the Honda City, the Suzuki SX4 and the Toyota Corolla, said the report.

The Ministry of Heavy Industries is reportedly pushing the change, and supported by the vehicle manufacturers who have seen demand slow for mid-size cars in particular.

Despite the slowdown vehicle manufacturers have been maintaining growth with discounts and recent new model launches had added further momentum. Indeed, car sales were up 11.7% in September to 105,822 units, according to the Society of Indian Automobile Manufacturers. Sales of commercial vehicles were 42,770 units in the month, up around 1% on a year ago.

 

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