The small reduction in car rates, consequent to the reduction in the excise duty, will not majorly affect the car sales.

Following the budget announcement, Hindustan Motors-Mitsubishi Motors reduced price on select models by Rs 5000.

However, Y V S Vijaya Kumar, executive vice president, Hindustan Motors, stated that the excise rate cut was below expectations - "A few years back the government had imposed additional excise duty on automobiles. Actually, we were expecting an excise cut between Rs 20,000 and Rs 30,000. The small reduction of excise duty which comes around to only Rs 5000 is much below our expectation."

The company aims to achieve a sales target of 4000 pieces per month by targeting high income groups. But,"The 'small' reduction was no way going to boost up the sales volume, "Kumar added

Hyundai and Ford also reduced prices on select models by up to Rs 6,000 to pass the benefit of excise cut to customers.

On Thursday, Japanese carmaker, Nissan Motor India reduced prices on its sports utility vehicle X-Trail by Rs 5,000. The luxury model, Teana will be priced at Rs 21.42 lakh in India.

Commenting on the move, Kiminobu Tokuyama, Managing Director, Nissan Motor India, said, "We welcome and appreciate the positive direction taken by the government and have decided to pass on the entire benefit to our customers."