Honda Cars India Ltd (HCIL) today said there is a "high" incidence of taxes on automobile sector, saying "cars are more taxed than cigarettes" in the country.

"Today if you look at incidence of taxes on car whether it is excise duty, CST, calamity tax, education cess, VAT, road tax - if you look at all these taxes on car, probably cars are more taxed than harmful things like cigarettes... Taxation is extremely high," the company's senior vice-president (marketing and sales), Jnaneswar Sen said.

Sen said incidence of tax might range between 50 and 70% depending on cars.

Citing an example, he said, "If we are selling car at Rs. 100 (US$ 1.66) which is coming from a factory, customers are probably purchasing at Rs. 150 to Rs. 175 due to most of these taxes. Except transportation cost and dealers margin, the rest is tax which is 50 to 70%."

He also rued the fact there was no uniformity in rates of taxes in the states.

"In some states, VAT rate is 12.5% and in some other places, it is 14.5%. Road tax is 4% at one place and it is 16% at another," he said.

Sen also underscored the need for more clarity on the subsidy being given on diesel.

"Because of lack of clarity on the issue of subsidy on diesel... Will it continue or will it not... There is no clarity. We have invested in diesel cars but many people are thinking whether to invest or not. What will happen we do not know. What will happen to CNG we do not know," he said.

"Fuel policy is directly impacting car industry. Car industry which runs on both petrol and diesel and its mix is determined by prices of petrol and diesel. How much we produce diesel and petrol... Fuel prices are changing every month. The ratio of petrol and diesel cars is changing every month," he said.

He further noted the excise duty cut announced by centre in February this year had failed to bring growth in automobile sector.

"The current government at centre reduced excise duty in February but there is still no growth. Market sentiments are not positive. Customers are still waiting and postponing the purchase of cars," he said.

Sen said the industry wished for a stable government at the centre which should bring stability in policy.

On the issue of recalling of cars, Sen said, "It is an issue of mis-assembly. There is no complaint so far from customers. We expect only 3,000 cars would require any change of parts."

Honda Cars India Ltd (HCIL) recalled 31,226 units of select variants of the Amaze compact sedan and Brio hatchback to inspect them for a possible defect in the brake system.

Asked about new launches this year, Sen said the company will roll out new model Mobilio and re-introduce the Jazz this fiscal.

"Mid-size seven-seater Honda Mobilio in MPV segment will be launched in next quarter. Honda Jazz will be reintroduced in later part of this year probably end of third quarter or in fourth quarter. Both models will have petrol and diesel variants," he said.

He however refused to give details about the pricing of new launches.

He said the MPV segment market size in the country stands at 10,000 to 12,000 units per month. "We want to evolve this segment with the launch of Honda Mobilio," he said.

About the company's performance last fiscal, he said the company posted its highest-ever annual sales of 134,339 units during financial year 2013-14, recording 83% growth over the previous fiscal because of the success of the Amaze and 4th-generation City.

So far the company has sold about 80,000 units of the Amaze and 30,000 units of the City, he said.

The ratio of petrol and diesel cars in total sales is 45% and 55%, respectively.

On expanding dealers' network, Sen said the company will enhance its network 35% this year with focus on tier II and tier III cities.

"The company currently has 170 facilities in 107 cities in its network and this will increase to 230 facilities in 150 cities," he added.