Audi India expects subdued growth due to higher tax

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Published: March 1, 2019 3:57 AM

Taxes on luxury car brands are still high, especially the goods and services tax (GST) is at 28% and has cess 15-22%.

Rahil Ansari , head, Audi India

Driven by lower sales volume, German carmaker Audi is likely to see a muted growth in the current year. One of the primary reasons is due to the higher tax imposed on luxury cars. However, the group with its brands Audi, Ducati and Lamborghini, is optimistic and is planning to launch three new models Q8, A8 and R8 in the country during this year.

Speaking after the launch of a showroom in Hyderabad, Rahil Ansari, head, “Higher tax levied on luxury vehicles is not helping the luxury car category to grow in the country. Taxes on luxury car brands are still high, especially the goods and services tax (GST) is at 28% and has cess 15-22%. If luxury cars are made available to more, then we can sell more vehicles and tax revenues will increase” he said, adding that even a 10% reduction in taxes will help this category to grow.

“While luxury cars are more accessible now in terms of lower EMIs, we still have higher taxes for these cars,” he said.
“Last year, we have sold 6,463 cars and we don’t expect any growth. In future, we will sell cars that are niche and more in volumes and there could be a surprise entry of a new model in Indian market this year from their stable.”

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Audi India had a loss in terms of volumes in 2018 due to unforeseen closure of one of their largest dealers in the National Capital Region and the change of European emission norms that also led to some delay in introducing products into India.

Ansari said the company’s popular model Q2 was one of the brands that is likely to brought to India under the homologation scheme under which the government allows imports of up to 2,500 units without the need to adapt to Indian regulations.
“Q2 could be one of the cars under the scheme that would be tested in India under the scheme and see if the acceptance of Q2 is there,” he said.

To a query on the launch of its electric vehicle e-tron, he said, “Initially, the plan is to launch e-tron, first electric vehicle of Audi, in 2020. But, there is a lot of development in India for bringing electric mobility in India as soon as possible which may make us bring the e-tron in 2019, provided the charging infrastructure is in place.”

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