Luxury cars to cost 38-40% less
The Indian government is to sign a free trade agreement with the EU (European Union) by the month of April 2011. The deal is going to get real good news for the auto mobile world as the biggest element in the deal is the reduced import duties on the auto products. The revised import taxes policy will bring a remarkable fall in the luxury car prices present in the Indian auto car market. The fall is estimated to reach as low as 38%. the luxury car makers like Audi, Mercedes and BMW will sell their luxury cars at much lower prices now.
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At present the cars brought from the foreign markets has to go through many taxes and import duties which ultimately increases the end prices of these cars. the total effect of these taxes and duties reaches a high point of 110% on the European car’s value. Now with this new tax system, the cars will cost much lower like BMW-7 series costing over 80 lacs today will go down by 30 lacs.
The new Free Trade agreement between the two countries will encircle all the car components. With this the cars which undergo assembly process in Indian will also get a fall of 10%. But as per the statements made by Pawan Goenka who is the president in Siam (Society of Indian Automobile Manufacturers), this drop in taxes will hugely affect the local manufacturers. he said that every country looks for the secure environment of the local players and so do Indian govt. will look for.
Denying the above statement, Mr. Mitra who is the Director of Sales & Marketing, Mercedes-Benz-India said that the concept o Indian auto industry to suffer with this agreement is a myth. but he also commented that the import duties should be kept high when much competitive products are present in the market.
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