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Originally Posted by 4x4addict  As long as the import duty structure gives Indian manufacturers a huge cost advantage over Foreign brands, they can continue to sell sub-par products and many of us buy it because a comparable SUV from Ford, Toyota, remains outside our budget.
They only way to force indian manufacturers to get there is by leveling the duty structure and not to give them an undue cost advantage. Even if import duties came down to about 25% I think it will hurt the Indian manufactures as most people will pay the premium for better quality. |
Foreign manufacturers should take the business risk and roll out competitively priced local manufactured SUV's. No one is stopping them from doing that. India today does have the manufacturing eco-system and appropriate regulatory environment. I am sure that they will be able to garner sufficient numbers. You cannot have your cake and eat it too. The commitment to the market needs to be demonstrated rather than just adapting LHD models for RHD driving.
And not all pricing decisions that foreign manufacturers take are because of customs duties. If a model sells at a price 'x' in the US market, the cost price may be around '0.6x' (other '0.4x' being taxes/margins/warranty and customer service costs). When this model is imported into India, they pay tax only on the '0.6x' which at 100% duty might take the cost to '1.2x'. Add Indian taxes, margins, warranty and customer service costs, the final price should be '1.6x' and not '2.5x'. They clearly have a skimming strategy and want to address only the top end of the market.