due to soaring input costs and auto makers will not be able to absorb a higher excise duty. They will have to pass on the increase to consumers and that could hurt demand,” said an analyst with a Mumbai-based brokerage.Diesel car makers have even more to worry about: A government panel recommended they should be charged an additional excise tax of 80,000 rupees. The panel, which was set up in September 2009 with the aim of finding ways to rationalize the taxes levied by federal and state governments, said this tax would help balance the price of gasoline, which was deregulated last year, and diesel, which continues to be state-controlled. In New Delhi, the price of gasoline currently stands at 58.37 rupees per liter while diesel is 37.75 rupees a liter. There was talk the government was considering introducing the diesel tax already as part of last year’s budget. The widening gap between diesel and gasoline could mean it is more likely to be introduced this time around.Tata Motors and Mahindra Mahindra would be the worst-hit if an additional excise tax is levied on diesel cars, according to Mumbai-based brokerage Edelweiss Securities.Auto makers such as Tata Motors, Mahindra Mahindra and Bajaj Auto have sharply outperformed the broad market over the past 12 months. From a year earlier, the three stocks have gained 28%-68%, while the Sensex just 12%.Over the past one month, however, most auto companies have lagged behind the Sensex over concerns on rising production costs, higher fuel prices and more expensive car loans. Higher taxes would add to these woes, making the prospect of matching the results of 2010 even more distant. Add a Comment Error message Name We welcome thoughtful comments from readers. Please comply with our guidelines. Our blogs do not require the use of your real name. Comment Comments (2 of 2) View all Comments 7:09 pm February 21, 2011 Gokulram Arunasalam wrote: Car makers will only pass it on to consumers. As it is, they are grappling with soaring input prices, mainly steel costs. Hurting car maker margins further does not bode well for further investments in the sector,toms outlet. 3:08 pm February 21, 2011 ellenwoods wrote: Consider dropping collision and/or comprehensive coverages on older cars. Search online for Clearance Auto Insurance If your car is worth less than 10 times the premium, purchasing the coverage may not be cost effective. India Real Time offers quick analysis and insights into the broad range of developments in business, markets, the economy, politics, culture, sports, and entertainment that take place every single day in the world’s largest democracy. Regular posts from Wall Street Journal and Dow Jones Newswires reporters around the country provide a unique take on the main stories in the news, shed light on what else mattered and why,cheap toms, and give global readers a snapshot of what Indians have been talking about all week. You can contact the editors at indiarealtime@wsj.com,cheaptomsshoessalei.com.Check out the main contributors to the blog and their bios here. An error has occured and your email ha Related articles:

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