[AlokSriva]

Seems good times ahead for car buyers in India!

The Hindu Business Line : Auto cos may soon lose import tariff protection

Auto cos may soon lose import tariff protection
Our Bureau
New Delhi, April 28

The Commerce Secretary, Dr Rahul Khullar, has warned the automobile and auto ancillary industry in India that it cannot continue to hide behind high import tariffs for long. This suggests that the sector should get ready for lower import duties.

The total import duty on Completely Built Units is around 106 per cent, while that on Completely Knocked-Down Units is 60 per cent on an average. Import duty on auto components ranges from 7.5 to 10 per cent. A reduction in import duties would benefit Japanese and European Union auto-makers the most. India is currently negotiating Free Trade Agreements with Japan and the European Union.

“How long are we going to carry on, in a core sector like auto, living behind very large protective tariff walls? Isn't it time that we woke up and said, ‘hey this industry better shape up, because if it does not, it will ship out',” Dr Khullar said. He said the Government was open to protecting the domestic auto sector in FTAs, but added that “unless you (the auto industry) colour this with a vision of where you are going to get 10 years from now, you are not going to make it. It is time to start identifying not what you are good at, but what you should be good at.”

Dr Khullar said the Government was considering the problems being faced by the auto export sector including the rupee appreciation, high steel prices and the need for a Technology Upgradation Fund. An Ernst & Young study said India's automotive exports should touch $35-42 billion by 2016.

But the million $$$ question is when would the GOI wake up and make this a reality!

Mods - Creating a new thread after searching for something similar. Please merge if there is an existing thread which probably didn't show up in my search results. Thanks!

[aargee]

Hope this wake up call to Indian automotive industry is taken seriously & some good quality automobiles are available for us.

[canonball]

Phew about time we have been shouting atop voices to reduce duties make things more competitive and numbers/volumes will more than make up and exceed revenues for govt. Not to mention consumers will be king = be more generous than they already are to buy cars which seem a waste of money today !

[ph03n!x]

About time. The days of fearing that auto majors would not setup shop here if the import duty is nonexistent is well in the past. Quite a few major brands have already invested billions here, and more are on their way in. And India has become the export hub too. This move will only sound the wake-up call to all auto makers to give us the best, else we'll import it

[n.devdath]

WooHoo, looks like I should start saving for my next car, the Mazda Miata that I really adore.

Lets hope the implementation of the rule is equally fast.

[blackasta]

Wow - MMS opened the lockgate in 1990, now he should bring down the dam!
Man it gives me goosebumps to vision a 7 lakh lancer (around 15k USD in US) or a 8 lakh civic (around 18K USD in US) zooming in the streets of India.
imagine what would good hatchbacks cost - 4 lakhs for a i20? wohoo !!

[nirmaljusdoit]

Rise & shine, our homies !
Time to shape up or ship out !

About time the government realized that the customer is truly the King and not the domestic automakers.

They've been taking their own sweet time in giving us customers what we want and its only been what they feel is right for us.

Its the survival of the fittest

[S350L-E240]

I without any bias hope if there is a change in the tax structure then it's only about increasing the duties on CBU. I think the current structure promotes a lot more activity in India in terms of manufacturing which in terms creates a lot of jobs etc. and those who need expensive niche products can and will always pay the required duties.

[prince_pervez]

^^ If after slashing the duties to 0%, the R1 comes to about 1 Lakh on road then the local manufacturers have something to worry about. R1 will retail at around 5.5 if and if there is a 0% duty, which is not likely at all.
Plus the local manufacturers are only nearing the 1 Lakh figure mark.

So I don't think any percentage drop in the duties would significantly hamper margins of Local players. An average guy who can afford a top end Pulsar, will not suddenly jump to an R1 even if the duties are slash by 50%.

[akj53]

Apart from lowering import duties, Government should also enforce world class safety standards here immediately and ban production of 'Match-boxes-on-wheels' like Maruti Omni immediately. In fact it should have been done long ago. Why should we continue to get 20 year old models while paying current prices. Only manufacturers of such models are happy as continue to make fat profit on such obsolete junks.

[avishar]

The government wont go for a drastic reduction of taxes,nor is going to be for price bands.So a 8 lakh ruppee civic i dont think is a reality.What the government might to do is reduce taxes for highend cars retailing above 25 lakhs.
However,companies importing high duty engines and gearboxes for local production of cars,will find their bills lower and may pass on the benefit to the consumer.

[blackasta]

Originally Posted by S350L-E240

I without any bias hope if there is a change in the tax structure then it's only about increasing the duties on CBU. I think the current structure promotes a lot more activity in India in terms of manufacturing which in terms creates a lot of jobs etc. and those who need expensive niche products can and will always pay the required duties.

But we are paying more than required duties for not so great cars now!!

Originally Posted by akj53

Apart from lowering import duties, Government should also enforce world class safety standards here immediately and ban production of 'Match-boxes-on-wheels' like Maruti Omni immediately. In fact it should have been done long ago. Why should we continue to get 20 year old models while paying current prices. Only manufacturers of such models are happy as continue to make fat profit on such obsolete junks.

Abolutely. Make ABS+2 front airbags must on all vehicles. car makers in US start basic versions without A/C, stereo, manual roll windows, and manual adjustable ORVMs, but even the base version has ABS+Airbags+TMPS. All due to governmnet norms, open economy and fair competition.

Originally Posted by avishar

The government wont go for a drastic reduction of taxes,nor is going to be for price bands.So a 8 lakh ruppee civic i dont think is a reality.What the government might to do is reduce taxes for highend cars retailing above 25 lakhs.
However,companies importing high duty engines and gearboxes for local production of cars,will find their bills lower and may pass on the benefit to the consumer.

why the 25 lakh margin? cars costing less do come in as CKDs.

[tacho]

Misleading thread title. But I am happy that the commerce secretary didn't talk about raising duties, considering these are times when increasing road tax is the in-thing.

In any case, instead of eliminating import duties, I will be happier if they reduce excise and VAT to 0% on all cars

[AlokSriva]

Originally Posted by tacho

Misleading thread title

What's misleading about the title? Do let us know and also, do suggest a correct title and we can request mods to oblige.

[SkyWalker]

high time. Its time local manufacturers upped their game rather than waiting behind protective walls. We need that maturity in the industry.

And i dont believe in the manufacturing story. India is looked at as the manufacturing center of choice not just because of high CKD costs. Globally, its time all countries opened up their industries and improved their game.