Auto manufactures have started to slash prices of various vehicles following the recent excise duty cut, announced by the union government. Two-wheeler companies such as Hero Honda, Bajaj and Honda Motorcycles and Scooters India has slashed motor cycle prices in the range of Rs 1,000-2,000. Hindustan Motors also slashed price of the Ambassador by Rs 10,000-14,000.

The second-largest two-wheeler company, Bajaj Auto announced immediate price reduction of Rs 2,100-4,400 for motor cycles. The company said in a statement, "Bajaj Auto has passed on the benefit of the excise reduction in cenvat rate to its customers. The company has announced price reduction ranging up to Rs 2,100 and Rs 4,400 ex-showroom on its range of 2-wheelers and 3- wheelers respectively."

Honda Siel Cars India (HSCI) slashed prices of City, Civic and Accord models by Rs 19,000-31,000. The price of entry-level Honda City will be Rs 7.51 lakh as compared to Rs 7.70 lakh earlier. Civic can be purchased at Rs 11.87 lakh against Rs 12.16 lakh, while Honda Accord can be purchased at Rs 16.72 lakh as compared to earlier price of 16.99 lakh.

Market experts believe that recent price cut would push the demand and help to mitigate the impact of the global slowdown on Indian economy. HSCI CEO, Takedagawa said, "We welcome this move by the government. The reduction in duty will give the necessary boost to consumer demand and fuel growth in the Indian economy. We feel it will also arrest the negative growth in the automobile sector."