India raises duty on large vehicles

The Indian government has increased the duty on vehicles with engine sizes larger than 1500cc. The move is an attempt to steer customers away from vehicles with low fuel efficiency. Car buyers will be charged an additional Rs15,000 (US$348) for vehicles with an engine size of between 1500cc and 1999cc, while customers who buy passenger cars and sport utility vehicles (SUV) with engines greater than 2000cc will have to pay an extra Rs20,000 (US$464). It remains to be seen what effect this further cost increase will have on the vehicle market in the country, especially now that the price of fuel has risen and the cost of credit will expand following a jump in interest rates to 8%.  (June 16, 2008)