Imported luxury cars will be costlier by up to Rs 15 lakh or even more, while prices of sports utility vehicles will also go up, with the Finance Minister P Chidambaram today proposing a hike in excise and customs duties on these products.
The move to single out SUVs for additional excise duty was criticised by industry players. Mahindra Group Chairman Anand Mahindra said that the move "destroys a level field".
Major importers of luxury vehicles, including BMW, Mercedes Benz, Audi and Jaguar Land Rover, are tight lipped on their next step, but industry sources said the hike in the customs duty will be passed on to customers.
"This is not a good Budget for the automobile industry. With duty hikes, all manufacturers will pass on the burden to consumers and this will further dampen the ongoing sluggish sales," Toyota Kirloskar Motor (TKM) Deputy Managing Director and COO (Marketing and Commercial) Sandeep Singh told PTI.
If sales fall drastically, people may even lose jobs, particularly at dealers' end, in future, he added.
"TKM will pass on the entire burden to consumers. The excise hike will affect our multi-utility vehicle Innova and SUV Fortuner, while the hike in customs duty will make our Land Cruiser and Prado costlier," Singh said.
Although the company is yet to finalise the exact amount, it will be a hike of Rs 30,000-50,000 for Innova, he added.
"The Fortuner will be costlier by Rs 60,000-75,000. Similarly, Prado's price will go up by Rs 10-12 lakh. We will also raise the price of Land Cruiser by around Rs 15 lakh," Singh said.
