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Old 9th August 2017, 09:54   #676
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Default Re: GST effect on car prices?

Though it is not clear what will be the exact tune to which prices of large sedans/ SUV's will increase. Here is a speculative impact though this will be on the higher side.

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The proposed rise by 10 percent is considered as a significant increase as manufacturers usually hesitate to increase prices by even 2 percent. No manufacturer will absorb the price hike and will pass on the rise to the consumer which will thereby hurt sales.
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Old 9th August 2017, 10:53   #677
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Originally Posted by Moto$apien View Post
That is fairly lucid. But, wait a minute, private jets & yachts @3%!

No wonder the middle class remains in middle of the tax sandwich!

Making Tax inflated purchases from a tax deflated salary
Although, percentages can often be misleading, as the absolute outlay may not be clear.

25% of 1000 = 250
3% of 100000 = 3000

Even if the absolute amount is higher in the second case, it is not really commensurate with the cost of the product. The second product costs 100 times more, but the tax is only 12 times more.
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Old 9th August 2017, 11:18   #678
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Default Re: GST effect on car prices?

If any one wana buy an SUV now is the right time, lotta discounts will roll both from Manufacturer's side as well as the dealer till this revised cess rates kick in
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Old 9th August 2017, 11:23   #679
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Default Re: GST effect on car prices?

On a separate note, does S.No. 51 mean that cars like Camry hybrid would once again see a reduction of price post the initial GST hybrid madness? Seems to be pegged at 15% now.
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Old 9th August 2017, 11:33   #680
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Originally Posted by Axe77 View Post
On a separate note, does S.No. 51 mean that cars like Camry hybrid would once again see a reduction of price post the initial GST hybrid madness? Seems to be pegged at 15% now.
When have you seen a jacked up price coming down in india?. Be it onions or cars. People inflate the onion prices during lorry strike and they seldom come down to pre existing levels after the strike ends. There is always an opportunity to increase the price.
If u had seen the other thread, the minister of coal, power and renewable energy is not for supporting hybrids. He wants electric cars in india which is still eons away.

http://www.team-bhp.com/forum/showthread.php?t=189292 (Government not interested in promoting hybrid cars, says Minister for Power)

So sorry to quash your dream thought, it is never going to come down 😂.

Last edited by drashkum : 9th August 2017 at 11:36.
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Old 9th August 2017, 11:50   #681
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Default Re: GST effect on car prices?

Quote:
Originally Posted by Dry Ice View Post
Although, percentages can often be misleading, as the absolute outlay may not be clear.

25% of 1000 = 250
3% of 100000 = 3000

Even if the absolute amount is higher in the second case, it is not really commensurate with the cost of the product. The second product costs 100 times more, but the tax is only 12 times more.
Let me give you another angle, from a buyer's perspective. We all make buying decisions based on our income, right? Let's say we decide that the maximum amount we can splurge on an item like an automobile is 50% of our annual income. Assuming that we all have same purchase wants/desires. (With or without financing.)

That means a person buying something worth 1000 in your example should have a minimum annual income of Rs. 2000. The tax that person pays is Rs 250, which is a whopping 12.5% of their annual income.
The same logic, when applied to the 100000 rupee purchase, the tax payable is a meager 1.5% of the buyer's annual income. Fair?

Last edited by Horizon81 : 9th August 2017 at 11:51. Reason: better choice of words for readbility
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Old 9th August 2017, 11:52   #682
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Default Re: GST effect on car prices?

when people don't buy, everything comes down. Auto manufacturing is one of thrust sectors of economy, supporting thousands of ancillary industries and millions of jobs. So any excessive taxes on automobiles will always be streamlined in interest of higher volumes.

Last edited by lurker : 9th August 2017 at 12:04.
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Old 9th August 2017, 16:21   #683
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I find it amusing that the government thinks that cars with an engine greater than 1-5L and more than 4mm of length are "luxury items". If we want to compete with the west, this thinking has to change, a car like a Corolla is considered a luxury car which is ridiculous, how will we increase our standard of living if the taxes are going to get jacked up all the time?

Last edited by GTO : 10th August 2017 at 10:54. Reason: typo
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Old 9th August 2017, 21:59   #684
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I think its high time all luxury manufacturers unite and stand together against this injustice. They know how much market share they have and this high tax structure definitely isnt helping them nor us.

If they need to invest and give jobs to people, they need to say what this or any govt in India is doing wrong straight at their face.
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Old 10th August 2017, 02:39   #685
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Default Re: GST effect on car prices?

Hi Guys

Was hearing a lot on how luxury car manufacturers are offering the best of prices post GST. Hence made a comparison of prices before 1st July and after for jaguar land rover range rover products. (Attached)
Interestingly if i look at percentage reduction it isn't close to 10% so now after increase in cess by 10% the prices should effectively become even higher than what they were pre GST regime.

Is my understanding correct?
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GST effect on car prices?-1.jpg  

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Old 10th August 2017, 08:42   #686
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Default Re: GST effect on car prices?

Everyone planning (including myself) to buy a large SUV/Luxury cars, should make a decision soon. It's ridiculous the way GST Council wants to flip-flop on such strategic topic. Anyways it's not in our control either.
Those taking deliveries of the car on/before next announcement will be very lucky.
Both Ford and Toyota called me yesterday, asking me to make up my mind because they may not have huge inventory in their stockyard. So they want me to book one immediately with whatever color choice is available at yard.

I'm mostly done deciding and will book one tomorrow, with delivery anytime this month

Last edited by harishpr : 10th August 2017 at 08:43.
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Old 10th August 2017, 09:20   #687
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Default Re: GST effect on car prices?

One thing is clear, the prices of cars rarely comey down in India for multiple reasons: we are generally tax heavy, we are anti luxury and globally cars are seen as climate killers to be discouraged. So just buy what you like if you see a reasonable deal, planning around tax policies can be frustrating. I just hope they don't think of taxing cars that have already been bought
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Old 10th August 2017, 09:48   #688
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Originally Posted by drashkum View Post
When have you seen a jacked up price coming down in india?. Be it onions or cars.

So sorry to quash your dream thought, it is never going to come down 😂.

I appreciate your sentiment and can understand where you're coming from but the fact is when GST came in, all manufacturers (including Toyota) wherever applicable DID reduce the price (whether in full or not is debatable but they did reduce and by meaningful amounts). At that time, the GST regime directly resulted in Camry pricing going up because of the classification of hybrids.

It appeared to me that the GST rate has been reduced for hybrids but I'm not sure and that was the aim behind my question actually. Has the GST rate in fact been reduced for hybrids. If that is indeed the case, I have no doubt Toyota will in fact reduce the Camry prices to reflect that downward correction.
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Old 10th August 2017, 10:04   #689
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Default Re: GST effect on car prices?

Here is a straightforward interview with Mercedes-Benz India CEO and MD, Roland Folger.

His statements highlight what a troublesome business environment some manufacturers are having in recent times due to policies and laws made without much thought and rationale.

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Mercedes-Benz India Pvt. Ltdís managing director (MD) and chief executive officer (CEO) Roland Folger is upset by a proposed policy change in India that seeks to increase the cess on luxury cars to 25% from 15%. That is over and above the maxim goods and services tax (GST) of 28% that luxury cars already attract. The policy change has put Folger in a spot; he was lobbying hard to get more models to India and make them locally in order to expand the market. He is concerned that his global colleagues may put investment plans and the introduction of new models in India on the back burner after the latest tax change.
This statement especially highlights his frustration.

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The problem is due to the taxation that we have and basically no changes; whenever there was a small little scope of a volume growth, somebody came up with a bright idea and killed the segment again. It started in 2015 and 2016 December, we will not forget that date...with funny issues like diesel bans, demonetisation, and then you had the GST announcement, and that was positive for five seconds and then itís going down again. How can you expect that segment to grow? There were other players who wanted to enter the market but you basically pulled the rug from under them. How do you explain it to your headquarters why suddenly in India there is a complete turnaround again and exactly for whatóbecause we cannot even explain what is the rationale behind that decision.

And then we blame manufacturers for not bringing in premium products that they offer elsewhere!
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Old 10th August 2017, 11:32   #690
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Default Re: GST effect on car prices?

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Originally Posted by libranof1987 View Post
And then we blame manufacturers for not bringing in premium products that they offer elsewhere!
It's ironic that India Inc. on one side is trying hard to attract more FDI leveraging on policies like "Make in India" and on the other side pushing in half-baked policies and then turning them upside down stating weird reasons. Can't believe the fact that the price decrease of premium models were overlooked during GST discussions! Completely agree with the sentiments of Benz CEO, how can someone knock at the head quarters door every month seeking change of plans to a potentially strategic market! What consistency and stability of govt. policies can we highlight as an aspiring country!
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