New CKD rates to jack up luxury car prices

09 May 2011

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With the government having tripled the taxation on luxury cars assembled in India, the manufacturers are set to raise the prices of their already expensive cars by up to 10 per cent.

Mercedes, BMW, Audi, Land Rover and Renault will soon raise prices of cars assembled in India by up to Rs10 lakh as the government has hiked customs duty on 'CKD' (completely knocked down) units of foreign cars from 10 per cent to 30 per cent.

"We are looking at increasing prices for one of our major models in the next few weeks. We would be paying high tax on one of our cars with a high proportion of pre-assembled components. The new policy regulation has forced us to bring in new prices," Peter Honegg, chief executive officer and managing director of  Mercedes Benz India, told the media in New Delhi on Saturday.

The company plans to raise prices of its top-end S class sedan, which already starts from about Rs85 lakh. The new lot of S class sedans produced in April will reach the showrooms in four to six weeks and will carry a revised price tag, he said.

He added that the company is assessing further prices in view of the new duty structure.

According to a report, Audi, BMW and Land Rover will also increase the prices models assembled in India. These cars are in the price range of Rs30-90 lakh.

Luxury car sales doubled to 15,000 in 2010-11 from a year earlier, driven by rising incomes and easy monetary policies.

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