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Last Updated : Feb 24, 2020 02:28 PM IST | Source: Moneycontrol.com

Why Maruti Brezza petrol is priced higher than rivals

The reason for the Brezza’s petrol variant being higher than competition when its diesel version is cheaper is because of Maruti’s choice of engine, which results in higher tax incidence.

 
 
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Maruti Suzuki today launched the petrol variant of its bestselling micro SUV Vitara Brezza but a higher price point than of rivals such as Hyundai Venue or Tata Nexon.

Priced at Rs 7.34 lakh (base variant, ex-showroom-Delhi), the petrol Vitara Brezza is priced Rs 79,000 higher than the Hyundai Venue priced at Rs 6.55 lakh. The petrol Tata Nexon is priced at Rs 6.95 lakh. The new petrol Brezza also competes with the Ford EcoSport and the Mahindra XUV 300.

In comparison, the base diesel version of the Brezza is priced at Rs 7.62 lakh, lower than Venue’s Rs 7.8 lakh.

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The reason for the Brezza’s petrol variant being higher than competition when its diesel version is cheaper is because of Maruti’s choice of engine, which results in higher tax incidence.

The Vitara Brezza petrol uses a 1.5 litre BS-VI engine, which makes it ineligible for lower tax benefits. As per current regulations, all cars measuring less than 4 metre and which have a petrol engine of less than 1.2 litre and a diesel engine of less than 1.5 litre attract GST of 28 percent, alongwith a nominal cess of 1 percent.

All cars that are either longer than 4 meters or have an engine capacity higher than 1.2L (petrol)/1.5L (diesel) are charged higher cess, leading to effective rates between 31-50 percent. The petrol Brezza is taxed at 45 percent (28% GST and 17% cess).

Comparably, the Hyundai Venue comes powered by a choice of 1 litre and 1.2 litre petrol engines and a 1.4 litre diesel, all of which qualify for the tax benefits.

The diesel version of the Brezza benefitted from the lower taxes.

The diesel Brezza may be continued after March as Maruti has so far not disclosed plans of upgrading the variant to BS-VI standards that becomes mandatory after April 1.

With average monthly sales of nearly 10,000 units the Vitara Brezza is amongst the top five best-selling models for Maruti Suzuki. It is also the best-selling mini sports utility vehicle in India.

While Maruti Suzuki has decided to do away with small diesel engines, measuring less than 1.5 litre in capacity under the BS-VI regime its rivals such as Hyundai, Kia Motors, Ford Motor Company and Tata Motors have different plans. All the four companies have small diesel BS-VI engines in their portfolio.

According to Maruti Suzuki, upgrading small diesel engines to meet BS-VI emission norms will be a costly affair and beyond the acceptable limits for the buying class. The company has thus decided to offer a mix of hybrid and CNG as an alternate option for diesel.

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First Published on Feb 24, 2020 02:28 pm
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