Prices of premium cars fall by Rs 10-30 lakhs

As the automakers recently started manufacturing their luxurious and expensive vehicles in India, the ex-showroom price of these cars have subsequently gone down. This certainly is a good news for customers as the cars have now become more 'affordable'. In the past couple of months, prices of these luxury car models have dropped by Rs 10-30 lakh. The manufacturer has also started sourcing engine and other components within the country which is the prime reason in slashing of prices.

In January, Mercedes Benz launched its premium flagship model S-Class S500 at a price of Rs 1.57 crore. After its initial launch, the prices have gone down by a huge amount of Rs 21 lakh once the company decided to manufacture it locally. The automaker now manufactures S-Class at its Chakan Plant in Pune. When the CKD version was launched, to everyone's surprise, the company has cut more than Rs 21 lakh bringing down the ex-showroom price to Rs 1.36 Crore.  Mercedes-Benz also launched the diesel S Class as S350 which is a locally manufactured product priced at Rs 1.07 crore.

Similarly, the Tata owned Jaguar has cut off Rs 25 lakh from its 3.0-litre XJ bringing its price south to Rs 91 lakh. The homegrown carmaker has also started manufacturing its premium vehicles in its production plant at Pune.  Moreover, BMW also introduced its third generation sports utility vehicle X5 with a price tag of Rs 70.90 lakh - almost Rs 10 lakh less than the previous model.

To further help the cause, the automakers has also started manufacturing their new vehicles on the similar platform. The Completely Build Unit (CBU) attracts customs duty of 100 %, so it is wise to locally manufacture or assemble vehicles rather than going the CBU route. The locally assembly attracts just 30% tax. Companies like Mercedes-Benz and BMW sources their engine from Force Motors Pune which also helps in cutting the costs. Parallely, the demand of luxury vehicle have increased from 28,000 units in FY13 to 35,000 units in FY14.  

Eberhard Kern, MD & CEO, Mercedes-Benz India, said "We are offering different options to customers for different prices." On the launch of locally manufactured S-Class, Mr Eberhard said, ''No other car stands for Mercedes-Benz brand promise more than the S-Class and we are delighted to manufacture the new S-Class at our state-of-the art production facility in Chakan, Pune. Quality has all along been the strength of Mercedes-Benz India, and the new S 500 production in India is set to take this success story even further.”

Amit Kaushik, Principal Analyst for autos at IHS Automotive, an international consultancy said, "We may see companies such as Fiat-Chrysler bringing the Jeep portfolio through the imported completely built route, but afterwards (may be within a year) they will change that to local assembly."

Source: TOI