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Budget 2018 Impact on Passenger Cars in India. Car Prices to Increase

Budget 2018 Impact on Passenger Cars in India. Car Prices to Increase

Budget 2018 Impact on Passenger Car Prices, know how is hike in CKD Duty going to Impact on Passenger Car Prices in India. Complete Analysis of Union Budget 2018 on Passenger Car

 

Budget 2018 Impact on Car Prices

Budget has once again come up as Negative for Passenger Cars in India

A Hike in Import Custom Duty on CKD (Completely Knocked Down) Goods raised to 15%. Been many Luxury Car Manufacturers Import Engine - the hike in Custom Duty to as high as 15% (from existing slab of 7.5%) is going to impact in Prices of the Luxury Cars and not only Luxury Cars - but the fact that even Auto Manufacturers like Honda, Toyota, Ford, Maruti Suzuki and others has some percentage of Sourcing from Japan, USA

Audi, BMW, Mercedes Benz, Volvo, Porsche - all are going to be Majorly impacted by same, however the price hike to be relative lesser in case of Domestic Manufacturers

Even - Custom Duty raised on CBU - effectively Fully Imported Cars from 20% to 25%. Net result is a very steep overall Import Duty - so care to Import cars like Benley, Lamborghini or even Ford Mustang - Prices going to be increased too of these cars.

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1. Also no changes in GST slabs were done in Budget 2018 on regular, Petrol, Diesel and CNG cars. 

2. No Announcement on Subsidy for electric cars, Hybrid Cars announced. 

3. Nothing referred on extension of FAME (Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India) benefits 

4. Nothing Referred on VVMP Scheme (Voluntary vehicle Fleet Modernization plan) - where car owner having 10 year Old Cars to sell their cars in exchange of new car with additional benefits in form of GST duty waiver

5. Nothing Referred about bringing Petroleum Products in GST Framework. However, to act as solace - Excise Duty been slashed by Rs 2 per Litre in Budget on both Petrol and Diesel

Increase in Custom Duty on both CKD and CBU - to negatively raise the sentiment of Luxury Car Makers - who were already jolted after the hike in Cess (on initial euphoria of 1 month - where they were happy when GST came in) .

Now the Hike in CKD Duty is going to increase in prices of all Segment of Cars and this will be definite negative impact as this was least expected from Government after increasing Cess last year to hike in Import Duty

The Home Grown Manufacturers like - Mahindra & Mahindra, Tata Motors to be not impacted by this announcement.

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Wednesday, 24 July 2019

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