Luxury cars in the Indian market are all set to get expensive as the government of India has increased the customs duty on assembled cars to 30 percent from 10 percent earlier. Though there is no announcement from the car makers' side regarding the hike of the car prices, market watchers say that cars assembled from CKD (completely-knocked down) kits may get costlier by as much as 4 lakh.
The customs duty hike proposed in the Budget was 60 percent earlier, but in a reaction to the protest by the luxury car makers in the country, FM Pranab Mukherjee brought down the duty to 30%. In a statement given to ET, a Mercedes Benz official said, "We are evaluating the same (FM statement) on a case-to-case basis and will prepare a final assessment. We will thereafter share further details."
The leading luxury car makers in India including BMW, Mercedes and Audi have reacted sharply to this duty hike. The third largest car maker Audi had even threatened to scale back proposed investments in India. The second largest luxury car maker in the country – Mercedes Benz India – has asked the government a one-year grace period so that it could adjust as per the new norms.
