Following a sharp excise duty hike by the government in the Union Budget 2012-13, the luxury car makers in the country are all set to raise the prices of their cars by up to Rs 3 lakh. The leading luxury car makers including Audi and Mercedes Benz have already announced to hike the prices of their India portfolio cars, directly passing the impact of the excise and import duty hike to customers.
The Indian government has raised the basic customs duty on the import of the cars value more than USD 40,000 (powered by a 3,000 cc petrol or 2,500 cc diesel engine) to 75 percent from earlier size of 60 percent.
While commenting on the matter, Audi India Head Michael Perschke said, "The increase in excise and customs duty on large cars in this budget is very surprising. This increase comes at a time when the Indian automotive industry was finding favour with customers looking for better and efficient cars."
On the other hand, Mercedes Benz India’s Director (Corporate Affairs and HR) Suhas Kadlaskar said, "The Budget is very disappointing for us. We were hoping for some reduction in taxes for large vehicles instead of hiking it further. "
Conversely, the Industry body SIAM (society of Indian automobile manufacturer) on the other hand has welcomed the government’s move of increasing duties on import of cars. Speaking on the matter, SIAM President S Sandilya said, "The increase in customs duty on cars and MUVs, valued above USD 40,000, from 60 per cent to 75 per cent seems to be a step to encourage local manufacturing, value addition and employment."
