With the reduction in the additional excise duty levied on the big cars, auto major Mitsubishi has severed the prices on high end cars by Rs 6,000.

A statement made by the company revealed the benefit will be on Pajero, Outlander and Montero models - "HML is passing on the entire benefit to the customers who can expect a Rs 6,000 cut in Pajero, Outlander and Montero prices effective July 7."

Mitsubishi, the Japanese car maker has presence in India via joint venture with Hindustan Motors Ltd.

With the new rates applicable, the cost of Montero will come to stand around Rs 41.88 lakh from Rs 41.94 lakh. The Pajero will come at Rs 20.64 lakh (old price Rs 20.70 lakh), while Outlander cost has been reduced to Rs 20.69 lakh (old price Rs 20.75 lakh).

With this, Hindustan Motors Ltd (HML) becomes the first car maker to declare price cuts in reaction to the budget announcement.

The company has also reduced duty on petrol-driven trucks to 8 percent from the earlier 20 percent.

Other car makers, BMW, General Motors and Toyota have been also working to transfer similar benefits to the customers.

P Balendran, VP, General Motors India, said, "We will pass on the benefits of this excise duty cut to our customers immediately."

In a similar statement, Sandeep Singh, TKM Deputy Managing Director (Marketing), "We have always been passing on all benefits to the customers, which we get from the government. Though this cut is very minimum, still we will pass on this."

However, Honda Siel Cars India (HSCI) may not reduce the prices, as explained by HSCI spokesperson, "We will not cut prices. There is lot of pressure on bottom line due to depreciation of Rupee in the international market."

Described as 'common man budget', the Union Budget for 2009-10 was presented by Finance Minister Pranab Mukherjee on July 6, 2009. The budget proposed reduction of the additional excise duty on big cars with engine capacities of 2,000 cc (and above) by Rs 5,000 per unit. The duty of petrol-driven trucks has also been brought down to 8 percent from the earlier 20 percent.

In a pre-budget meeting, Urban Development Minister, Jaipal Reddy proposed exemption of value-added tax and central excise duty on urban transport buses with more than 20 seats.