Luxury carmakers like Audi, Mercedes-Benz and BMW had witnessed a growth of five times in the category of sub-25 lakh for last three years. They are very keen to bring in more of them over here, but the tax structure of 75% on fully imported cars had loosen their backbone in this segment. In spite of such levitations, there is also another route for automobiles to enter India and i.e. CKD (completely knock down units). Under this ruling, Indian official machinery charges only 10% of tax on the breakdown jaws. These contributes are further assembled at local manufacturing units which considerably brings down the input cost.
Industry experts say that, it needs a demand for 50,000 units in order to go with the localized manufacturing as compared to 25,000 luxury cars being sold in last calendar year.
From most of the luxury carmakers, BMW and Audi are thriving hard to hit the floor with starting segment wearing a ‘Made in India’ tag. BMW is actually a whole luxury fraternity in itself, selling major brands like BMW, MINI and Rolls Royce individually. Though, four ringed Audi is not the one to be left behind as it is in collaboration with bulging Volkswagen Group.
Bavarian Motor Works planned to make 1 Series in the Chennai plant, as facility is well versed with global quality parameters. 7 Series Saloon is also in pipeline to the Bavarian’s Indian guild. Philipp von Sahr, President of BMW, confirmed that this strategy will help them to deliver value at competitive prices.
VW owned Audi is now riding high with the success of Compact SUV Q3 which will soon enter the local factory by mid of this year, following A3 later on. This is not the end of road for them, as Michael Perschke, Head of Audi India assured that they will increase the number of models to five for localized built up.
Luxury carmakers seem to be giving a good blow to the sedans (of not so premium brand) with their heavily loaded niche bucks at such a competitive note.