Mercedes Benz, BMW and Audi get ready to increase car prices in India by up to Rs 300,000: Budget 2012

Following Mr Pranab Mukherjee’s Budget 2012, which has acted like a gift wrapped time bomb for citizens of India, leading luxury car manufacturers – Audi, BMW and Mercedes Benz are planning on increasing prices of their cars by Rs 2 lacs to Rs 3 lacs.

According to Budget 2012, excise duty has been increased from 10% to 12% whereas import duty on cars costing more than $40,000 and having engines larger than 3000 cc (diesel) and 2500 cc (petrol) has been increased to 75% from 60%. Made in India cars too are not spared, as cars having engines larger than 1500 cc will now carry an excise duty of 27% instead of 22%, which they carry currently.

Mr Suhas Kadlaskar, Director (HR and Corporate Affairs), Mercedes Benz India, said, “We are going to pass on the additional burden to customers. We have not decided the exact amount yet, but on an average it will vary between Rs 2 lakh and Rs 3 lakh. The premium car makers usually bring in advanced technology into the country and this step will be very counter productive. The Budget is very disappointing for us. We were hoping for some reduction in taxes for large vehicles instead of hiking it further.”

Mr Michael Perschke, Head, Audi India, said, “The increase in excise and customs duty on large cars in this budget is very surprising. This increase comes at a time when the Indian automotive industry was finding favor with customers looking for better and efficient cars.”

Spokesperson from India’s largest luxury vehicle manufacturer, BMW, said, “We have not decided about the price increase yet. We finalise our startegy next week whether we will pass on the additional burden to consumers or not.”

BMW India has a plant in Chennai where they produce 3 Series (except 330d Convertible), 5 Series (except 535i), X1, and X3. BMW imports 330d Convertible, 5 Series 535i, 6 Series, 7 Series, X5, X6 M5, M6 and Z4 as CBU’s. Audi India has a plant in Aurangabad where A4, A6 and Q5 are produced while A7, A8, TT, RS5, R8, and Q7 are imported as CBU’s. Mercedes Benz India has a plant in Pune where C Class, E Class and S Class are produced while the one’s imported as CBU’s include – CL Class, CLS Class, GL Class, M Class, R Class, SL Class, SLK Class, G Class, and SLS AMG.

Some of the best selling cars in India too are going to cost more. Following table will give you an idea of what to expect once the new excise duty rates come into effect;

Maruti Alto – Rs 4500 to Rs 6000

Hyundai Eon – Rs 5000+

Maruti Swift – Rs 8000 to Rs 11000

Maruti DZire – Rs 8000 to Rs 13000

Hyundai Verna – Rs 11500+

Honda City – Rs 12000 to Rs 15000

Toyota Corolla – Rs 26500 to Rs 35200

Toyota Fortuner – Rs 80000

Mahindra XUV500 W8 – Rs 35000