India's Tata Motors cuts vehicle prices

Tata Motors Ltd, India's largest vehicle maker, said it had cut prices of its vehicles after the government lowered a tax as part of a stimulus package over the weekend.

The cuts on cars range from 12,000 rupees to 23,000 rupees, for commercial vehicles from 17,000 rupees to 60,000 rupees and for utility vehicles from 16,000 to 36,000 rupees, it said in a statement.

The government on Sunday announced a four per cent cut in central value-added tax on all products other than petroleum.

Most vehicle makers, reeling under sluggish sales, have passed on the price benefit to customers.

The country's largest car maker, Maruti Suzuki India, in which Japan's Suzuki Motor Corp. has a 54.2 per cent stake, and Hyundai Motors' India unit were among the first to announce reduced prices.

India's car sales last month fell by a fifth, its worst fall in eight years, with high borrowing costs and tight credit pulling down demand. Sales of trucks and buses fell by nearly half, data from the Society of Indian Automobile Manufacturers showed.