India Drops Tax Breaks on Cars

Maruti Ciaz

The Indian government has phased out breaks on excise taxes for cars and other consumer goods, effective Jan. 1.

The resulting increases will range from 8% to 24% depending upon a car's size and price and cost between 8,000 and 200,000 rupees ($126 and $3,200), according to BBC News.

The policy shift produced a sharp increase in sales in December. Sales jumped for Maruti (13% to 98,100 units), Hyundai (15% to 32,500), Mahindra (5% to 17,300), Honda (163% to 14,400), Ford (28% to 14,400) and Tata (30% to 12,000), The Financial Express reports.

Analysts expect this year's higher prices to generate a sales slump in January that will continue for several months. Car dealers are bracing for an especially big decline in demand for SUVs.