Government had announced In the Union Budget that SUVs which have engine capacity more than 1500cc and Ground Clearance above 170mm will get additional excise duty of 3%. This has made most of the SUV makers to go back to drawing board. Mahindra have a SUV packed portfolio and this has affected.
In order to get away from the additional excise duty Mahindra is all set to introduce XUV 500 with 160mm ground clearance before it was 200 mm. Mahindra has also give stone guard to protect the engine underside and has also tweaked the electronics, brakes and clutch to cope with the lower ground clearance. With the Tax undercut Base variant of XUV 500 is cheaper by 27,000 RS and the top end W8 by RS 33,000.
Mahindra is also working on how to under cut the extra for other SUVs also. Mahindra is developing a new smaller engine for the bolero. But it will at least take 18 months to hit the product. This will help Bolero to under the cut the tax. Mahindra will reduce the ground clearance of Scorpio to get the tax benefits. Tata will also the same formula for there SUVs and MUVs to under cut the extra tax.
source : Economic Times
