Luxury car makers have started hiking prices across their model range by about 5% after the government hiked import duty on specific vehicles in this year’s Union Budget. The percentage of the price rise may seem small, but if seen in absolute terms, the country’s best-selling compact SUV, for instance, the Vitara Brezza, or the most awarded car last year, the Hyundai Verna, could have been bought with the difference between the new and old prices. German luxury car maker Audi India on Friday said that it will hike prices by up to `9 lakh owing to the increase in customs duty that was announced in this year’s Budget, starting from April 1. The hike will range `1-9 lakh based on the model. The company currently sells models in a wide price range starting from the `35.3-lakh Audi Q3, which is an SUV, to the supers sports car Audi R8, which costs Rs 2.6 crore. Rahil Ansari, head, Audi India said that the company has tried to absorb most of the impact that may come from the increase in duty and has minimised the price hike.
Showing his disappointment at the increase in duties, he added, “While the luxury car industry is undertaking several initiatives and investment to make the dream of owning a luxury vehicle more realistic for all, we also expect the government to support this industry. There is no doubt that increase in car sales would definitely help the government in garnering more accumulated taxes.” In the Union Budget 2018, the government had announced a hike of 5% in customs duty on both completely knocked down unit (for trucks, buses, cars, motorcycles) and completely built unit (for trucks and buses) imports, taking the rates up to 15% and 25%, respectively.
Meanwhile, Mercedes-Benz had earlier said that the company may hike prices of the new stock that is yet to be custom cleared by around 3.5-5%, depending on the model. BMW India has also planned to hike prices after April 1. However, the company has not disclosed the amount of increase in prices. Other car makers have also increased prices earlier. Volvo India raised prices by about 5% across its range of models.