Luxury cars to get dearer, Mercedes announces price hike by up to Rs 3 lakh

Mercedes Benz India has expressed disappointment over the hiked excise duty imposed in the Union Budget. This can result into an increase of up to Rs. 3 lakh in the prices of all the petrol and diesel cars of the company. According to Suhas Kadlaskar, the Director of Corporate Affairs and HR, the company was planning on reducing the prices of the large vehicles rather than increasing them further and this has really disappointed the company. He added that this step would not prove to be very productive for the premium car makers, as usually they are the ones who contribute advanced technology to the country. Mr. Kadlaskar also mentioned that the company is going to pass on this load to the customers. The exact amount will be decided with time but on an average the car price hike would lie between Rs. 2 lakh to Rs. 3 lakh, he added. Cars powered with petrol engines under 1,200cc and diesel engines under 1,500cc and having length above four meters will now be levied 24% excise duty instead of 22%.

A fixed Rs 15,000 duty will also be levied on the cars. On the other hand cars having length more than 4 meters and engine capacity of over 1,200cc and 1,500cc in case of petrol and diesel respectively will be charged an excise duty of 27 per cent in place of 22 per cent and also a fixed duty of Rs 15,000. The fully imported vehicles with FOB value of more than USD 40,000 with engine capacity of more than 3,000cc and 2500cc for petrol and diesel respectively, will have to bear a rise of 15% in the custom duty from 60% to 70%. The President of the Society of Indian Automobile Manufacturers (SIAM), S Sandilya has gladly accepted the higher customs duty on imported luxury vehicles. He also indicated that the increase from 60 per cent to 75 per cent in the customs duty in cars and MUVs that value more that USD 40,000 is a good move. This step will definitely encourage local manufacturing, value addition and employment, he added.