Buyers line up for luxury vehicles as prices set to rise from April 2013

author image CarTrade Editorial Team
Saturday 30 March 2013, 12:25 PM

The demand for luxury vehicles from Indian arms of Mercedes-Benz, Audi and others has increased tremendously, with many of these running into long waiting periods. As per 2013-14 Union Budget, the prices of high end models, such as Jaguar XJ, Audi R8 and Mercedes-Benz AMG would be escalating by 25 per cent from April 1, 2013. This is bringing about a much needed forward movement in the luxury car market.

Commenting on the same, an official from Audi India said, “The stupendous demand in March for our imported cars has increased on waiting on these machines- which will now flow into the next fiscal year.” Further, Eberhard Kern, Managing Director and Chief Executive Officer, Mercedes-Benz India, was quoted as saying, “We have seen high traction for our sedans and our award-winning M-Class SUV that now enjoys a waiting period of four months." He also added, “Going by the current market trend, we expect to maintain the positive growth traction rest of the year with some fascinating product launches lined up.”

Apart from this April increase, another reason for this surge in demand is taking place as import duty on fully built cars above Rs. 22 lakh has been increased to 100 per cent from 75 per cent. All luxury manufacturers are also increasing prices with effect from April 1, 2013. On the positive side, this decision affecting the luxury segment has brought some life back into the otherwise slow auto market. Interestingly, other vehicle manufacturers also hope that they can benefit from this rise as well.

As an indication of increased luxury vehicle purchases, banks are also seeing many customers walking in for loan applications. Commenting on the same, a senior executive from HDFC Bank said, “Our finance disbursements for March have been the highest to customers and dealers. The benefit of buying cars and SUV at almost 20-25 per cent cheaper rates has acted as huge incentive to advance any purchase decisions.”

Recently Audi increased the prices of the Q range of SUVs, including Q3, Q5 and Q7 by 2.5 per cent, while R8 and RS5 will be dearer by 15 per cent. The rise in R8 and RS5 is greater because these vehicle are sold as Completely Built Units (CBUs) in India. Mercedes-Benz was the first car maker to have increased its prices by 1 to 4 per cent for locally built models and up to 20 per cent for CBUs. As per reports, the rising raw material costs, changes in tax structure, import duty and exchange rates have resulted in this increase.

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