The Government of India has hiked the CKD duties to 30% from the previous 10%. The said increase will affect most carmakers who import parts from abroad and could lead to a price hike of upto Rs. 4 lakhs on some BMW and Mercedes-Benz models. During the 2011 Union Budget, the FM Pranab Mukherjee had proposed a hike to 60% but after the protests from car makers, the hike has been halved at 30% levels.
If the affect takes place with immediate affect, it will cause havoc amongst luxury carmakers. Mercedes-Benz India has asked for a grace period of one year to adjust production according to the new norms set by the Government. Audi and BMW are yet to make a statement on the same but things are not looking positive for the two German automakers. When the luxury car segment has been showing tremendous growth over the years, does the Government have to intervene and spoil the stupendous performance? In China luxury cars sell more than 200 times then what are sold in our country. Point to ponder, definitely!