Team-BHP - Top-end European cars may get cheaper

Good news! Isn't it?
NEW DELHI: Finally, top-end automobiles may cost less with India softening its position on reducing import duty on these products shipped from the European Union.

Quote:

Customs duty on completely built cars is over 100% and the government is toying with the idea of using tariff rate quotas, which will allow only a limited number of vehicles to be imported at concessional rates. Officials also said given the problems in Europe and the loss of competitiveness, the threat from cheaper imports was lower now.

Source & Link to the Times of India Article

well if the premium cars would come cheaper, that would still effect the premium cars manufactured in india (likes of laura, superb, cruze, civic etc.) right?

i mean imagine a c-class coming (CBU) for maybe under 20 lacs (reduced taxes) - who would consider buying the laura or the cruze or the jetta?
or maybe the e-class coming (CBU) coming in for lesser than 30 lacs - won't it effect the c-class market (considering it's assembled here right now) ?

i guess they should change the norms of bikes. even if a bike is available in india for 6 lacs after all the duties paid - it still won't disrupt the indian manufacturers as their bikes are still maybe 80-90% cheaper than these bikes.

but to come to think of it - this again is proposed - who knows when and how will it happen.

Quote:

Originally Posted by samyakmodi (Post 2584037)

I think what they mean by premium could be cars in the above 90 Lakh or 1 crore segment. There is no way anyone would let entry/mid level luxury car prices to come down.

so if it's a 50 lac plus car OR a crore Rs. plus car, would it not mean that the tax exemption is given to the people who can afford it?

rich people get exemption for their toys while the poor have to pay taxes even to breathe.

something's not right here.

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Quote:

Originally Posted by esteem_lover (Post 2584163)

Whatever makes you think this will be passed on to the consumer ? This is for the auto industry not for the auto enthusiast.

could you please explain how reduction on duties paid for import of 50+ lac cars is going to help the Indian auto industry? Would this not let manufacturers import cars at a lower cost thus furthering them from the idea of manufacturing such cars in India?

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 ?

Definitely interesting development.
If the high end CBUs become cheaper and start competing in different price-bracket, its bound to have a cascading impact on a bunch of lower segments. Manufacturers would need to revisit their margin calculations on luxury vehicles.

Personally, I don't support this move at all. I'm a firm believer of the "If you want to sell it here, BUILD IT HERE" philosophy. I hope the Government continues to impose exorbitant taxes on CBUs & full Imports.

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.