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Old 28th February 2011, 13:28   #16
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Default Re: Car, bike prices to go up post Budget?

No hike in excise duty.

Special incentives for hybrid vehicle makers if manufacturing done in India to be positive for auto companies (Source:ET)
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Old 1st March 2011, 13:43   #17
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Default Re: Car, bike prices to go up post Budget?

Looks like the definition of CKD has changed to exclude those with pre-assembled engines, gearboxes etc according to an ET article and this might impact cars like X1, 3 - Series, 5- series, C & E-class and some Audi's as well.

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1 Mar, 2011, 10.01AM IST,TNN

Union Budget 2011: Entry-level luxury cars may cost more
A provision tucked away in a corner of the Budget papers could well spoil the party for a section of carmakers , especially multi-national companies such as BMW, Audi and Mercedes, that otherwise were rejoicing with other players in the auto industry over the FM sparing a hike in excise duty.

Hidden in the memorandum explaining the provisions of the Finance Bill was a point over what comprises a completely-knocked down (CKD) vehicle, or one that is just assembled here though being near-imported in its composition.
“A definition for ‘CKD unit’ of a vehicle, including two-wheelers, eligible for concessional import duty is being inserted to exclude from its purview such units containing a pre-assembled engine or gearbox or transmission mechanism or chassis where any of such parts or sub-assemblies is installed.”

In simple terms, this implies that auto companies that are doing CKD business in India with fully-imported pre-assembled critical parts like engines or gearbox or transmission cannot claim the lower 10% import duty on them as these will no longer be defined as CKDs. This would bring these vehicles at par with fully-built units and thus slap a hefty 60% import duty on them, which would go up to as much as 110% after the addition of counter-vailing duty, VAT and other local levies.

A change in the duty would mean a drastic hike in prices of all entry-level luxury cars from the stable of BMW, Mercedes and Audi.

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. The hikes could be very hefty, say industry sources, and could be well over Rs 8 lakh or even more in case of each model.

Even companies such as Toyota may be affected as it does not make any engine for its cars in India, including its newlylaunched Etios sedan. It is importing engines from Thailand and Japan.

When contacted, auto industry body Society of Indian Automobile Manufacturers (Siam) appeared confused. “This apparently seems very restrictive, if you go by the literal translation. We have to understand what is the intent of the government. We will seek a clarification from them as early as tomorrow,” Siam president Pawan Goenka said.

Interestingly, Maruti and Mahindra — top local manufacturers who have completely indigenized operations — were among the biggest gainers on the sensex.

The shocker aside, the FM packed a punch of green in his Budget proposals . “To provide green and clean transportation for the masses, National Mission for Hybrid and Electric Vehicles will be launched in collaboration with all stakeholders,” the FM said.

Companies said this would help in developing the technologies within India in the long run, though the high costs and their near-negligible market here (due to high prices currently) leaves a question mark over the efforts. Also, multinational companies like Honda and Toyota are not keen to indigenize these technologies as there are no economies of scale and it becomes expensive.

“It makes no sense for us to make these vehicles here as certain critical technologies will have to be transferred and scale would be missing, making it unviable ,” said a senior official with a big Japanese automaker.

LUXURY CURBED

New move may badly hit CKD operations of luxury makers such as BMW, Audi and Mercedes CKD cars could see hefty price hikes, well over Rs 8 lakh or even more Models hit could include BMW 3-Series , 5-Series , X1; Mercedes C- and E-Class ; Audi A4, A6 and Q5
Source - Union Budget 2011: Entry-level luxury cars may cost more - The Economic Times

Last edited by pacman2881 : 1st March 2011 at 13:44.
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Old 1st March 2011, 15:33   #18
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Default Re: Car, bike prices to go up post Budget?

I read this in today's paper and this looks to be something that will impact all manufacturers and not just the premium ones.

Honda, Toyota, VW all of these manufacturers also import full engines and transmission. Probably full chasis with engine drive train and suspension. It will be a big problem for even these companies.

Hopefully this is resolved else we will see ANHC, Vento, Civic, Altis all go up by a few lakhs.
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Old 1st March 2011, 15:57   #19
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Default Re: Car, bike prices to go up post Budget?

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Originally Posted by vid6639 View Post
Honda, Toyota, VW all of these manufacturers also import full engines and transmission. Probably full chasis with engine drive train and suspension. It will be a big problem for even these companies.

Hopefully this is resolved else we will see ANHC, Vento, Civic, Altis all go up by a few lakhs.
I believe the additional clause of full engines / transmission is applicable if it is a CKD. None of the lower end Honda's, VWs, or Toyota would fall under CKD itself and hence won't be affected.
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Old 1st March 2011, 22:58   #20
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Default Re: Car, bike prices to go up post Budget?

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Originally Posted by pacman2881 View Post
I believe the additional clause of full engines / transmission is applicable if it is a CKD. None of the lower end Honda's, VWs, or Toyota would fall under CKD itself and hence won't be affected.
Why not? The Honda's engines are fully built engines from Thailand. Same goes for Toyota.
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Old 1st March 2011, 23:11   #21
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Default Re: Car, bike prices to go up post Budget?

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Originally Posted by vid6639 View Post
Why not? The Honda's engines are fully built engines from Thailand. Same goes for Toyota.
Yes but the rest of the car isnt CKD.It has some localization(i think around 50% for City?).So it cannot fall under this new rule.
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Old 18th March 2011, 13:19   #22
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Default Re: Car, bike prices to go up post Budget?

Tata has announced price hike of vehicles.

Tata Motors to hike vehicle prices

Skoda has also planned to increase prices (as per dealer).
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Old 25th March 2011, 16:41   #23
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Default Re: Car, bike prices to go up post Budget?

Any concrete details on the expected price increase for different cars post budget? Some friend told me it might some 10-15% increase on the OTR for CKD cars, seems pretty steep!!
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Old 6th April 2011, 10:07   #24
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Default Re: Car, bike prices to go up post Budget?

Maruti is at it again. It has hiked prices across ALL models by up to Rs. 9000.

Here's the story :
Maruti hikes prices by up to Rs 9000 - The Times of India
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Old 6th April 2011, 10:22   #25
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Default Re: Car, bike prices to go up post Budget?

Cedia Sports which I enquired about during last month was 11.3L on road, Bangalore. After this new rule took effect, it has become 12.6 on road, being CKD I guess my purchase will have to wait a while now
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