Honda CEO asks the govt to re-examine the tax structure, says safety regulations to be kept in mind

President and CEO of Honda Cars India, Yoichiro Ueno said that keeping in mind the safety regulations coming in for vehicles from next year, the government should re-think the tax structure, which currently current stands in favor of smaller cars.

Longer cars have a more stable body structure that absorbs shock better. In light of the new realities emerging in India, it will be good to re-examine the tax structure which currently makes small cars more attractive," Ueno told ET.

In India, excise duty on small cars stand at 12.5% whereas it stands at 24% or more in the larger vehicles segment.

Honda has struggled in recent months as more and more consumers shift to petrol cars. Honda plans to realign its inventory at dealerships and is now looking at growing steadily in the second half of the year.

"There was a 10% swing in favour of petrol cars. We had to realign inventory as there was excess stock at dealerships. Our wholesale numbers have come down but retail is almost flat", Ueno told ET.

Honda has planned to increase its dealerships from 309 to 345 across 197 cities.

(image:Reuters)