Excise duties have created a rift in automobile fraternity

The current budget session has ensured that the automobile industry in India is in a dire situation. There are many who have lauded the efforts of the Government whereas the main division namely Society of Indian Automobile Manufacturers (SIAM) have opposed the changes. The aforementioned changes are related to lowering of import duties for cars, which currently stand at 105 %, to a lesser percentage. Obviously the ones supporting this cause are the foreign luxury car makers namely BMW, Mercedes, Jaguar and Audi.

Pawan Goenka, as the President of SIAM has opposed this move saying that it would affect the sales of the local automobile brands. Lowering of import tariff means that the foreign luxury cars, which have access to much better materials and engineering would upset the apple cart for the local manufacturers. He also said that local employment would also be adversely affected due to this. To counter this, the foreign lobby are saying that India doesn’t boast of any homegrown product which actually competes in the luxury segment and hence the sales for the Indian brands wouldn’t be lowered by any chance. They also said that if the duties are going to be lowered then there would be more demand for the foreign cars and this would eventually push the foreign manufacturers to start building these cars in India, thus boosting the employment part as well. Moreover, the Indian car market currently has about 70 % of users who prefer cars below 2000 cc whereas most of the foreign luxury cars are above this engine capacity.

The foreign brigade is also saying that the Government should atleast lower import duties for cars with green credentials. This would enable the foreign players to showcase their green technology and with good results. We at Indiandrives would request the government to take a call on this issue soon.

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