BENGALURU (Reuters) - Top Indian automaker Maruti Suzuki said on Wednesday it lowered prices of some cars, making it one of the first major companies to respond to the government’s move to cut corporate taxes in a bid to revive economic growth.
The company cut prices on 10 different models by 5,000 rupees ($70) each, representing discounts of just about 1% or less on average car prices. The price cuts start on Wednesday.
This comes as the domestic automobile industry faces a crippling slowdown in demand that has led to production cuts and thousands of job losses.
Maruti said the move was aimed at reviving demand by sharing “the benefits of corporate tax reduction with its customers”.
The price cuts will kick in just ahead of the festive season, and Maruti said it hoped the move would help entice entry-level customers.
On Friday, Finance Minister announced a cut in the headline corporate tax rate to 22% from 30% in a move widely cheered by local stock markets.
The cuts were the latest in a line of government measures aimed at reviving growth in Asia’s third-largest economy, which slumped to a six-year low in the April-June quarter.
Maruti’s shares were down 2.7% at 6,811.30 rupees by 0514 GMT on Wednesday amid a broader decline in Indian stocks. [.BO]
($1 = 71.0700 Indian rupees)
Reporting by Sachin Ravikumar; Editing by Subhranshu Sahu