Companies

Heavy tax burden on luxury car segment: Audi India’s Balbir Singh Dhillon

Nandana James Mumbai | Updated on March 22, 2021

‘Treat the segment on par with overall automobile sector, don’t single us out with additional cess’

The luxury car market in India is heavily burdened by the taxation and duty structure and the two requests the sector always has put forth to the government is to treat the luxury car segment on par with the automobile industry as a whole and not to single it out with additional cess, said Balbir Singh Dhillon, Head of Audi India.

“The taxation on the luxury segment is extremely high. The GST plus cess goes as high as 50 per cent.. on top of that we have 10-20 per cent registration taxes and then we have the high import duties. All put together, we are really burdened by the taxation and duty structure. Also, the complexity of our business, because our customers expect us to bring all the new models available anywhere in the world to India. There are also complexities of regulations that are burdening us,” Dhillon told BusinessLine, on the sidelines of the launch of the new Audi S5 Sportback in India.

The new Audi S5 Sportback was launched at a starting price of ₹79.06 lakh (ex-showroom), and the four-door sports coupe is being brought to India via the CBU route.

Demand spurt

On demand, Dhillon said a positive momentum is discernible in the first quarter of 2021, on the back of the demand spurt in the market as well as the products Audi India is launching. However, due to the increase in commodity prices as well as challenges in the availability of certain precious metals, Audi India may have to hike price soon, said Dhillon, adding that the extent of the rise is yet to be decided.

The company plans to launch products in all the segments it operates in to clock a high double-digit growth in sales this year, even as the luxury car market saw a 40 per cent decline in sales last year. Audi has charted out a five years’ plan, called strategy 2025, focussing on four pillars — customer centricity, products, digitalisation and network, to achieve the same, he said.

Electric cars

Audi India will soon launch two electric cars — the Audi e-tron SUV and the e-tron Sportback.

“We are confident about the electric vehicle market in India. Electrification is going to be a journey. And we have to be strong in this journey. To be successful in the country, we are confident because there are a lot of investments by various manufacturers, there are a lot of investments by the government, and also private players coming and developing infrastructure. All this put together, I think will be a positive outcome that we will see in the coming years,” Dhillon explained.

Audi India also plans to expand its pre-owned car business, Audi Approved Plus. Currently, Audi has seven such Audi Approved Plus showrooms, and it plans to increase this to 10 or more this year, said Dhillon. “This is also an opportunity to bring in more people to give them an Audi experience before they buy a new car. And there is a good demand at this point in time — the demand is more than what we can cater to.”

Published on March 22, 2021

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