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Old 21st November 2011, 15:53   #16
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Default Re: Top-end European cars may get cheaper

That, I believe, is not going to happen anytime soon. Or anytime in the future. Unless all the riches start to spend on these exotics like they spend on Mercs, Bimmers or Audi. This is not happening. Not even a CKD plant, let alone complete production here.

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Originally Posted by ACM View Post
We have been discussing this every few months out here and we all keep sharing our view points again and again.

I don't think this will actually happen. I am in favour of supporting the local manufacturers - As in those who manufacture locally be it India, korean, Japs, Americans or German.

Components that remain "imported" - as in "Not locallized" should be taxed higher. There should be a highest tax rate for fully imported vehicles and a second higher slab for those that just assemble here but import more than 50 or may be 70% of the components.

Local manufacurers with 90% + locallization must benifit. How else will we get the manufacturing to shift here for lower prices in the longer run and employment for those in India for the cars we buy here.
Supporting local manufacturers? Don't you think the government is filling its coffers filthily with 'safeguard' policies/excuses on all occasions. How could imposing 110% duties on a Gallardo make Aria's life easy?

Yes, if a Merc, in future, comes for under 20 lacs it will seriously harm Aria/XUV5oo or Superb's sales. What I am trying to explain here is Indian government should make some pre-defined set of rules before slapping the same 110% duties on all of the cars/bikes.

110% on a R1 to safeguard the P220 makes no sense to me, simply!!

Last edited by GTO : 22nd November 2011 at 18:53. Reason: Quoted post has been deleted
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Old 21st November 2011, 16:03   #17
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Default Re: Top-end European cars may get cheaper

Well, at the current exchange rate I think all duties reduction will only make up for the fall in the rupee..
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Old 21st November 2011, 16:09   #18
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Default Re: Top-end European cars may get cheaper

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Originally Posted by Shivank View Post
That, I believe, is not going to happen anytime soon. Or anytime in the future. Unless all the riches start to spend on these exotics like they spend on Mercs, Bimmers or Audi. This is not happening. Not even a CKD plant, let alone complete production here.



Supporting local manufacturers? Don't you think the government is filling its coffers filthily with 'safeguard' policies/excuses on all occasions. How could imposing 110% duties on a Gallardo make Aria's life easy?

Yes, if a Merc, in future, comes for under 20 lacs it will seriously harm Aria/XUV5oo or Superb's sales. What I am trying to explain here is Indian government should make some pre-defined set of rules before slapping the same 110% duties on all of the cars/bikes.

110% on a R1 to safeguard the P220 makes no sense to me, simply!!
Nope when govt fills it's coffers it fills it for us to spend on us, to use for rebate on fuel to build roads etc.

If the Skoda vehicles can be manufactured / assembled here inspite of the low numbers then so can the Mercedese, BMW, Audi and Jags. I do understand that a few models would be sold in so low numbers that it would not make sense but those can anyways be imported and it is fine for them to cost a fair bit more.

Infact this is double edged if it was only about marketing rather than substantial manufacturing then Indian manufacturers would simply buy a car model abroad and brand it under their name in India. If this policy did not exist then nor would be XUV, Aria to Corolla, Laura, Civic, to Jetta, Manza, dzire to the Brio, liva be manufactured here. The policy has forced a lot of manufacturing into India for the multinationals to be able to compete with the local solutions. The Local solutions have in each of those segment managed to compete reasonably be it the XUV or the Manza or the vista. Hyundai has infact made India a hub for exports and exports a substantial portion of its products manufactured here.

Yes a Lambo or the Phantom will end up costing a bomb but we do need to understand that those aspiring of them even at the cost without duties can also afford to pay for them with the high duties as well. This protectionism has born fruites already and India is quite competitive wrt to it's local manufacturing expecially the considering the true post license raj age of the Industry in India. We may need to provide this protection for possibly only another 10 years.
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Old 21st November 2011, 16:13   #19
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Default Re: Top-end European cars may get cheaper

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Originally Posted by Shivank View Post
That, I believe, is not going to happen anytime soon. Or anytime in the future. Unless all the riches start to spend on these exotics like they spend on Mercs, Bimmers or Audi. This is not happening. Not even a CKD plant, let alone complete production here.
Noticing the changes in the number of S class, 7 series BMW's and Rolls-Royce's in last couple of years, I don't think the day is far away when Lamborghini and Ferrari set up their CKD plants here in India.

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Yes, if a Merc, in future, comes for under 20 lacs it will seriously harm Aria/XUV5oo or Superb's sales.
Yes it will.! Well it may also result in price cut (read : HUGE PRICE CUT) in the Indian Manufactured automobiles.

Quote:

110% on a R1 to safeguard the P220 makes no sense to me, simply!!
If possible, govt may not reduce the duty on imports, but may add some kind of tax(may be a "MADE IN INDIA tax" ) on the locally manufactured automobiles.
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Old 21st November 2011, 19:36   #20
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Default Re: Top-end European cars, wine may get cheaper

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Originally Posted by esteem_lover View Post
Whatever makes you think this will be passed on to the consumer ? This is for the auto industry not for the auto enthusiast.
if it's not going to be passed on to the consumer, then who benefits from it?

and from where did the figure of 100-300% come from?

import duty on these vehicles is 114%.

@shivank
and again, if a gallardo is imported tax free too - how many of us would end up buying it??
and would it not again help the rich boys to buy more of their toys instead of the common man benefitting from the exemption??

and i completely agree to your point of the r1 VS p220. but don't want to venture that side as this is for CARS not BIKES.

completely endorse the fact that if you want to sell it here cheaper - build it here. why should the govt not tax whimsical imports which are not contributing anyway to the country's economics?? and if you don't wanna contribute towards the country's growth then please sit in your respective countries with minor orders. (though sheer number of exotics in india is defying it all)
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Old 21st November 2011, 20:20   #21
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Default Re: Top-end European cars, wine may get cheaper

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Originally Posted by ACM View Post
Nope when govt fills it's coffers it fills it for us to spend on us, to use for rebate on fuel to build roads etc.

Yes a Lambo or the Phantom will end up costing a bomb but we do need to understand that those aspiring of them even at the cost without duties can also afford to pay for them with the high duties as well. This protectionism has born fruites already and India is quite competitive wrt to it's local manufacturing expecially the considering the true post license raj age of the Industry in India. We may need to provide this protection for possibly only another 10 years.
Well...it's said that its for our own benefits but then we all pay taxes for it individually. Coming to roads, lets keep the potholed roads of our cities aside and come to NHs or expressways. There's no single expressway I have been to which does not ask for Toll taxes. We have some extraordinary roads but we need to pay taxes every time we use them. We are already paying for taxes, aren't we?

Lets not get into this though and save the argument for some other day. Rest of the points you raised, I tend to agree to most of them.

[quote=diesel_power;2584593]
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Noticing the changes in the number of S class, 7 series BMW's and Rolls-Royce's in last couple of years, I don't think the day is far away when Lamborghini and Ferrari set up their CKD plants here in India.
Highly unlikely! These are not luxury cars but top-end performance cars. There number on roads will always remain insignificant in terms of making profit by manufacturing here.

Quote:
Yes it will.! Well it may also result in price cut (read : HUGE PRICE CUT) in the Indian Manufactured automobiles.
A Merc at that price will only jeopardize the market. To save the market from this we have these policies.

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If possible, govt may not reduce the duty on imports, but may add some kind of tax(may be a "MADE IN INDIA tax" ) on the locally manufactured automobiles.
Yes, Indian government is very Chaaloo types. If these brands start to manufacture cars completely here. They might ask for 'Made in India' taxes as well. Remember a few months back when the government were about to increase taxes on CKDs? Every manufacturer was baffled that time. Audi had even threatened to close its shops here, IIRC.

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Originally Posted by samyakmodi View Post
@shivank
and again, if a gallardo is imported tax free too - how many of us would end up buying it??
and would it not again help the rich boys to buy more of their toys instead of the common man benefitting from the exemption??

and i completely agree to your point of the r1 VS p220. but don't want to venture that side as this is for CARS not BIKES.
See, I am not saying if government exempts a Ferrari or Lambo from taxes, I will go buy one. For a common man with or without taxes, owning a Gallardo will always remain unattainable! But if I am rich, slogged my asses for years to earn and have millions of money, doesn't necessarily mean it has no value at all. It's never about how much one can spend but the right way of doing that.

From the start of this conversation, my only point has been to reduce duties if the government thinks the product cannot harm the Indian market. Make it 60% instead of 110% for exotic cars. You are still making some profit. Just tax it accordingly.

These policies are to safeguard Indian manufacturers, right? So, just save them and not cash in on the riches' pockets in the name of safeguarding. If not Gallardo, a common/middle class man (biker) could even think of owning a R1 someday.
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Old 21st November 2011, 21:06   #22
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Default Re: Top-end European cars, wine may get cheaper

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Originally Posted by samyakmodi View Post
and from where did the figure of 100-300% come from?

import duty on these vehicles is 114%.
Maybe you googled, I didn't.
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Old 22nd November 2011, 09:35   #23
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Default Re: Top-end European cars may get cheaper

Our goverment gets 114% off every CBU just for letting the car into the country, and 100% of that duty ends up in someones pocket and goes out of the country to some European bank.

Reducing duty by 40-50%? Hell yeah they should and should for every CBU. Rupee isn't gonna see great days by robbing us of the 'dream' of owning exotics, someday.
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Old 22nd November 2011, 10:14   #24
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Default Re: Top-end European cars may get cheaper

Why is everyone complaining about how lowered Merc and BMW prices will kill the local market? Isn't that how we consumers end up with the best products at the most competitive prices? And we are talking about a duty cut not eliminating it all together. If the Europeans can give us a much better car at the same price of an Indian manufacturer AFTER paying a reduced duty of 40-50% then I think its time we Indians went back to the drawing board.

I work in the service industry and as far as we are concerned we have to prove to provide better solutions than anyone else internationally for our local market at a competitive price.

EDIT : Should have read it properly I support lowered duty on CKD not CBU. Though my argument stands for CBU as well.

Last edited by flipsyde : 22nd November 2011 at 10:18.
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Old 22nd November 2011, 11:57   #25
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Default Re: Top-end European cars may get cheaper

Wow, a very interesting discussion, and some great views on it too!

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Originally Posted by diesel_power View Post
Exactly what I was about to say.

Can't wait to see Lamborghini and Ferrari with a "Made in India" tag.
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Originally Posted by diesel_power View Post
Noticing the changes in the number of S class, 7 series BMW's and Rolls-Royce's in last couple of years, I don't think the day is far away when Lamborghini and Ferrari set up their CKD plants here in India.
There is absolutely no question of this happening.

Ferrari, Lamborghini, Pagani, Maserati are all extremely niche brands, by any standard. They price their products ridiculously high for a reason. They don't want everyone buying them. They want a few and exclusive customers.

Plus, these companies haven't moved out of their country and attempted to assemble elsewhere. They are home-grown, and home-bred to the last letter. Everything get's made and assembled, or should I say crafted and chiseled, where it always used to be, and always has. And that's Italy.

Yes things have changed, now that Audi owns Lamborghini, and the Gallardo has splashes of Audi all over it. But their flagship products have always been made and always will be made in Italy.

There is a certain charm about this. And making it anywhere else, would mean that the charm will be lost. I wouldn't want that, personally.

From what I see, Jaguar and Land Rover might benefit most from this. Since most of their products are above 50 lakhs and generally are 70+ on the road. Some higher end cars from the German trio, as well.

Last edited by suhaas307 : 22nd November 2011 at 11:58.
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Old 22nd November 2011, 13:48   #26
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Originally Posted by fre2bpowerless View Post
Our goverment gets 114% off every CBU just for letting the car into the country, and 100% of that duty ends up in someones pocket and goes out of the country to some European bank.

Reducing duty by 40-50%? Hell yeah they should and should for every CBU. Rupee isn't gonna see great days by robbing us of the 'dream' of owning exotics, someday.
Quote:
Originally Posted by flipsyde View Post
Why is everyone complaining about how lowered Merc and BMW prices will kill the local market? Isn't that how we consumers end up with the best products at the most competitive prices? And we are talking about a duty cut not eliminating it all together. If the Europeans can give us a much better car at the same price of an Indian manufacturer AFTER paying a reduced duty of 40-50% then I think its time we Indians went back to the drawing board.

I work in the service industry and as far as we are concerned we have to prove to provide better solutions than anyone else internationally for our local market at a competitive price.

EDIT : Should have read it properly I support lowered duty on CKD not CBU. Though my argument stands for CBU as well.
what you say is right to some extent. but if you think of the entire nation you have to keep these few things under consideration.
let's get the grey cells a bit of exercise.

if these cars come in in the price bracket of the "made in india" cars, forget about us enthusiasts, even a common man would want to buy the bigger brands. now what will that lead to??
1. the indian manufacturers would go out of business - resulting in major losses and unemployment. not would only the manufacturer close shop - even the ancillaries associated with them would be forced to go out of business. so we are not talking about unemployment of few thousand people in a factory, but we are talking about few thousand people in few hundred ancillaries. so if one factory closes down that would mean lacs of people would be left unemployed.
2. the indian manufacturers would have to upgrade themselves with better machines - though i am all in for better quality, but to think of it, better machines not only mean better quality, but better productivity too. though it sounds great to have good quality and better productivity - but it leads to more basic problems like - scores of people being unemployed, non availability of skilled people to run the machines, non availability of resources to maintain the machines, and more so, non availability of institutes to train people to operate these machines.

now how to get the vehicles available cheaper here in india for the consumer to benefit and blah blah..
the best solution for these auto giants is to come to india, setup a unit here, and that way they can "evade" the import duties to give you and me cars a lot cheaper.
benefits of it?
1. we as customers are getting good quality products for the good quantity of the money we are spending.
2. by putting up manufacturing units here, these auto giants are not only selling the cars cheaper, but also providing amazing opportunities for the local population for employment. and again the same way as the "one factory close down" logic, this in turn gives employment to few lacs of people - directly or indirectly.
3. since the vehicles would be manufactures here, that would mean not only the vehicles would be available cheaper but also maintaining them would be cheaper.
4. once these guys come up with their state of the art technology for better quality with minimum input, the over all quality of skill set of people would start improving. Citing the need for high skilled people in such big numbers, there definitely would be a lot of institutes NOW ready to train people with those skill set.

this would give a level playing ground for all the automobile manufacturing industries and would end not only benefit the consumer, but also the nation.

OT::
though the government will lose the 114% import duties, but it would get the taxes via various heads like excise, octroi, sales tax and blah blah.
as far as 100% of the duty paid going into someone else's pocket/bank accounts in european banks is concerned, we can only do onething - that is to push for the lokpal bill and also electing the right candidate to represent us. though the entire process is too complicated, but it has to happen someday.
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Old 22nd November 2011, 13:56   #27
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Originally Posted by esteem_lover View Post
Import duty on cars range from just over a 100% to 300%. If the top end cars (300%) is brought down to say 200%, the company is still going to import the car as CBU but still will not reduce the cost of it at all, maybe at the most by 5-10%. So who gains here ?
Tell me which car has 300% duty ? How is it possible ? If yes then please give names of models please ?

btw I want to know from people who really stay in India. Do you really think these High - End cars can be driven in India safely ?
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Old 22nd November 2011, 15:01   #28
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Originally Posted by samyakmodi View Post

2. by putting up manufacturing units here, these auto giants are not only selling the cars cheaper, but also providing amazing opportunities for the local population for employment. and again the same way as the "one factory close down" logic, this in turn gives employment to few lacs of people - directly or indirectly.
3. since the vehicles would be manufactures here, that would mean not only the vehicles would be available cheaper but also maintaining them would be cheaper.
4. once these guys come up with their state of the art technology for better quality with minimum input, the over all quality of skill set of people would start improving. Citing the need for high skilled people in such big numbers, there definitely would be a lot of institutes NOW ready to train people with those skill set.

this would give a level playing ground for all the automobile manufacturing industries and would end not only benefit the consumer, but also the nation.
Very well said samyakmodi.
You came up with a very important factor that may get affected by the cut in duty for the High end European cars; EMPLOYMENT. India, with its large population, has potential to produce these cars and still maintain the quality and value of the final products.

We have people with such skills and talent who can really make these products much better than they are.

We all love the red Ferrari, don't we?? but where does Ferrari get this paint from, Italy?? NO SIR, It is made here, in Gujrat, INDIA.
Ref: Gujarat paints Ferrari red - Times Of India

Where does Aston Martin get the rubber hanger from?? Its Lucknow,India.
Ref: Aston Martin has a Lucknow link - Times Of India
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Old 22nd November 2011, 16:18   #29
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Default Re: Top-end European cars may get cheaper

If you read the article and others floating on the net, there seems to be a quota system of how many vehicles will be allowed with lower tariffs.

Its still too early to presume the effects on the auto industry without knowing how many vehicles will be exempt from partial-complete duty and if the number is small, the manufacturers will NOT pass it on to customers.

Why is the Indian government doing this ?

Well, the European local economy is near its last foot they desperately need need their manufacturing base to stay afloat. By opening wines (no local producer in India) and high end autos they help the Europeans while at the same time allow our exports (anyone remember harley - mango arrangement with US?) which would have otherwise been not allowed.
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Old 28th November 2011, 17:20   #30
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Originally Posted by fre2bpowerless View Post
Our goverment gets 114% off every CBU just for letting the car into the country, and 100% of that duty ends up in someones pocket and goes out of the country to some European bank.
That is a very extreeme point of view.

If we say that 100% of a duty / tax goes into someones pocket / out of the country then the nation just wouldn't run.

Yes we are blundering through development and growth but yet definately are growing (including the public sector) and the country is developing. Yes corruption is there but if for fear of the loss on account of the same we for example stop paying our taxes the country would simply die.

We need to realize that while there are problems a certain level of protection to the local manucturers will go a long way towards our long term development plan. For those prepared to commit to the Indian economy there is indeed a level playing field.
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