GST Effect: Ford Offering Discounts Up To Rs 30,000

The Indian arm of the American carmaker Ford is now offering discounts up to Rs 30,000 on its mainstream cars like the Figo, Figo Aspire and the EcoSport. The company said that this move is to pass on benefits of the new tax rates under Goods and Service Tax (GST) that is expected to be rolled out on July 1, 2017.

On its sub-4 metre SUV, the EcoSport, Ford India is offering a discount that ranges between Rs 20,000 and Rs 30,000. On the other hand, customers opting for either the Figo hatchback or the sub-4 metre Figo Aspire sedan, will get a discount between Rs 10,000 and Rs 25,000. The reduction in the asking price will depend on the variant chosen. Customers can get these discounts on or before June 30, i.e. before GST is officially implemented.

The provisional draft of GST came with an assortment of good and not-so-good news for the automotive industry. As per GST, a car is still a luxury commodity and hence falls under the highest tax slab of 28 per cent. The real worry came in for small cars, which will attract a higher overall tax (base + cess) under GST when compared to the existing model. To understand the math behind this, we’ve have explained it in our story - Impact of GST on cars in India.

This move from Ford India is sure to set the tone for other small carmakers in India. Customers will surely rush in to get their car purchases sorted before GST comes into play as small cars are destined to become more expensive.

Last week we reported that luxury carmakers Mercedes-Benz and BMW have devised their own set of offers before GST is put into practice. However as per GST, unlike small cars, luxury cars are set to become a little more affordable in India. This move to offer discounts was put into place to ensure their sales register doesn’t run dry till July 1.