German luxury carmaker Audi Friday said the sale of luxury cars in India can increase beyond seven percent this year if the government streamlines the tax structure while providing clarity on the tax overheads.
"The excise duty concessions being taken away was a bit of a problem towards the end of last year. It is too early (this time of the year) but I would like to see some concessions... with the right tax structure, the market would grow very well," said Joe King, the company's head for India operations.
He said demand for luxury cars was increasing and a "right tax structure" would boost the segment where his company operates in.
"I think the tax structures (in India) are very very complicated and GST (goods and services tax) would be an enormous boost for everyone but clarity on taxes would be important," he said.
For the company, the roll-out of GST will help it focus on the individual states for growing business instead of opting for inter-state trade route. However, car prices will vary in each state on account of the sales tax which is charged by the states individually.
King said "consistency is the key" to business operations and the government needs to maintain the same with the Indian taxation structure.
"There are discussions that excise (tax) may be reduced... we welcome that but it is confusing for the customer" he said.
Of the 32,000 luxury cars sold in 2014, the company sold 10,851 cars, translating into a 34 percent market share in the segment.
While the luxury car segment grew only by three percent last year, King said his company grew by nine percent and is seemingly aggressive in maintaining the momentum.
Audi will be launching more than ten new models this year in the Indian market of which at least two will be in the SUV (sports utility vehicle) category.
Also, it is expecting a surge of 20-25 percent in its used car business segment this year.
On average, an Audi car annually depreciates by 20 percent on the selling price.
"We should see double-digit growth this year," King said.
