'Cess on diesel vehicles not a right approach'

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SME Times News Bureau | 17 Feb, 2012
Levying a cess on diesel car is not a right approach but the price of diesel could be hiked slightly to earn revenue, a top official of Ford India said Thursday.

Michael Boneham, president and managing director, said: "We hope to see a consistent legislative framework. I don't believe taxing diesel vehicles is the right approach when interest rates are already high. Taxing diesel vehicles is a regressive step."

According to him, the government is looking a levying a cess on diesel engine powered cars which in turn would increase the vehicle cost by Rs.80,000.

Boneham said the other option for the government is to increase the price of diesel by 75 paise per litre -- to earn similar revenue.

He hoped the auto industry would log higher growth rate this year and interest rates would fall.

Meanwhile, Ford India, the Indian subsidiary of the US auto maker Ford Motor Co, launched 45 dealerships across 35 cities.

With the new openings, Ford India has strengthened its pan-India network to 230 sales and service outlets in over 120 cities.

Boneham said the company would launch one sales outlet every 10 days.

He said the company's plan to expand its diesel engine plant was on track and would be completed by April.

Ford India is investing $72 million to increase the capacity from 250,000 units to 340,000 units per annum.