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Price Cut Down In Luxury Cars
The fall in the price for such cars is mainly due to the heavy tax structure by way of VAT, local taxes and other levies which accumulate to 110% in the unit price of cars. The pact, if gets shape, will reduce the price of BMW cars by Rs30 lakhs from the existing Rs80 lakhs. The pact called as Free Trade Agreement will comprise components which occupies major cost for cars assembled in India and will get a reduction of 10%. As in any such case, there are hue and cry from some segment for such moves from Japan and Korea who have no such privileges on FTA. Such companies have no relaxation of import duty out of FTA and they have made representations to the Indian government for encouraging local companies.
The Indian federation for automobiles, SIAM made it clear that it is not against such FTA but the equal protection to the local players in the market. But the counter statement comes from the luxury car makers who justify that the protectionism can be applied only when the local market is strong enough to feed the demand. They claim that there has been no considerable volume of luxury cars in the domestic market.
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