Friday, March 4, 2011

Luxury car prices likely to go up in India

With the growing clout in the luxury car segment, a new provision in the Budget could well lead to a hefty hike, over Rs 8 lakh or more, in the prices of entry-level cars of the companies like BMW, Audi and Mercedes. In what appears to be a bolt from the blue for the luxury car makers, mainly from the German stable, a change in definition of completely knocked down (CKD) car is threatening to derail the softer import duty regime.

The provision, hidden in the memorandum explaining the provisions of Finance Bill, has created panic among companies like Audi, BMW and Mercedes as they are scared that a jump in the prices of their India-assembled cars will hit demand.

Models affected could be all entry-level luxury cars. From BMW, these would include the 3-Series and 5-Series sedans and the X1 SUV from Mercedes the C-and E-Class sedans; and from Audi the A4 and A6 sedans and the Q5 SUV. Other companies who are having some CKD models will also be affected and these include Toyota’s Fortuner, Volkswagen’s Jetta and Passat and Ford’s Endeavour.

Source: Times of India (Daily Newspaper)


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