Audi, BMW, Mercedes cars to cost Rs 8 lakh more

The luxury car makers have been playing good in the high growing Indian auto luxury market. But now with the introduction of new budget, the luxury inventors may have to face a hefty hike of around Rs 8 lakh or even more. The hike will be applicable in the entry level car models by major luxury car makers , BMW, Audi and Mercedes.

The German car makers in particular have to face a more strict import duty on the completely knocked down (CKD) cars. With the introduction of this new budget, the German players are highly threatened.

The CKD unit of a vehicle in India has been changed in the perspective. Now those companies which are bringing their critical auto parts in India (like gearbox or transmission and engines which are pre-assembled) will not enjoy the lower import duty of 10%. Rather these companies then have to pay an import duty of 60% as in case of fully built units. The government has decided that those companies which are bringing fully assembled parts including engine and gear transmission box will not be considered as CKD units as the major assembling part is already done.

Now with this 60% import duties, the overall cost of the luxury cars will take a jump of 110% after adding up the counter-vailing duty, VAT and other local charges.
Among the affected includes the entry-level luxury cars like BMW 3-Series, BMW 5-Series, BMW X1 SUV; Mercedes C-class, Mercedes E-Class, Audi A4, Audi A6 and Audi Q5 SUV.

Among other affected companies includes the Volkswagen Jetta, Toyota Fortuner and Ford Endeavour. To raise a voice against thios hike the companies have approached the auto industry body Society of Indian Automobile Manufacturers (Siam). The company’s officials have said that this hike will affect the business world badly. The sales of these car models will severly be affected with these alterations in import duties.

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