CKD Duty Zoomed To 30 Percent
With the growing technology, the Indian automobile industry thriving and has been attracting many luxury car makers across the world. The Indian government has increased the CKD duties from 10% to 30%. This is the latest news that is creating buzz in the Indian auto market. There are many foreign automobile manufacturing companies that are importing the parts from abroad.
The hike in the CKD duty will affect mostly the luxury car manufacturing companies like Mercedes, Audi and BMW. Hike in CKD duty will increase the rates of the luxury cars up to 4 lakhs. The foreign car manufacturing companies such as BMW and Mercedes will be highly affected.
The 2011 union budget announced recently by the Finance minister of India, Pranab Mukherjee states that the CKD duty will be increased. Finance minister proposed to hike the CKD duty up to 60%, but has restricted it to 30 percent on the request of the car makers. This particular law will heavily affect the luxury car manufacturers. Mercedes has requested for a grace period of 1 year for the proper production of Mercedes Benz according to the latest norms by the Indian government.
German car makers BMW and Audi have not given any proper statement regarding the hike in price. The luxury car makers from the foreign countries are making fruitful business in the Indian automobile industry. With the hike in the CKD duty, the flourishing luxury car segment in India might get hampered. Chinese auto market on the other hand has already become a hub for the luxury cars and seems to be thriving copiously. Luxury cars are sold 200 times more than the Indian auto market. This is definitely a good point to be noted and proper steps should be taken for providing good scope for the luxury car makers to do business in the Indian auto market.
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