The Finance Minister of India has reduced the tax to 5 per cent from 10 per cent for people with annual income between Rs 2.5 lakh and Rs 5 lakh.
This is a big news for the Indian two-wheeler manufacturers. A majority of their motorcycle and scooter buyers come from this salary bracket. People in this bracket has the ability to save up for the two-wheeler EMI, but for cars, it’s a bit of a stretch. So the reduction in tax would lead to more savings, which will directly lead to new two-wheeler purchases. In fact, some of the customers would spend more than their planned budget and could opt for more expensive and better two-wheelers.
We’re expecting the footfalls in two-wheeler showrooms to increase from April 2017. It looks like the two-wheeler manufacturers will start their new fiscal year with good growth.