Skoda India has just announced that it cuts prices on all models by up to Rs (Rupees) 51,500 or $1,068 thanks to a recently announced 4 percent reduction of the Central Value Added Tax, formerly known as CENVAT. The Indian authorities took the decision to cut the CENVAT rate a few days ago on “all products other than petroleum and products where the rate was already less than 4 percent,” according to an article published by Just-auto.
Although it may sound like good news for the Czech manufacturer, this is the second time this year when the carmaker reduces prices on its models.
Skoda initially cut prices a few months ago when, due to poor sales in the country, it came out with special new offers to counteract the negative effects of the crisis.
According to the aforementioned source, new car sales in India adopted a descending trend ever since summer 2008, with local carmakers recording 19.4 percent less sales in November. Similar to companies evolving onto other markets, automakers distributing cars in India will likely bring even more price cuts in December with the same obvious goal: to boost sales in the last month of 2008 and get ready for the next year which, according to analysts, may prove to be extremely difficult.
On the other hand, Skoda started experiencing problems in most factories around the globe as it already confirmed that Czech production facilities will stop production on Friday during the first half of 2009. This is basically a cost-cut measure but Skoda does nothing more than to adapt its production for the market demand which seem to start the new year on the same decreasing trend.
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