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Luxury car maker Mercedes Benz favours consistency in the tax structure for further growth in country's car market.
Roland Folger, Managing Director and CEO, Mercedes Benz India said that the proposed revision in cess on luxury cars as recommended by the GST committee would affect the sales of luxury cars and SUV's.
At present the cess is 15 per cent over the GST rate at 28 per cent. “If it is one or two per cent above the present rate of cess, it will not affect much. However, it is better to implement the new rates after the festival season to maintain the growth momentum”, Folger said adding that the sales growth in the second half will depend on the implementation of the cess.
Ruling out any further investments in India for the time being, he said the company has been making lot of positive contributions like creation of jobs, bringing in new technologies etc. All these will be impacted by the high tax rates. “We need more clarity on taxation to go forward”, he told Business Line on the sidelines of the inauguration of the 6th AMG Performance Centre at Kochi on Monday.
At present, the growth in luxury car market in India remained flat due to confusion prevailing over the tax structure. According to him, Mercedes Benz had registered 18 per cent growth achieving the best ever June, second quarter, and half-yearly sales in 2017. It sold 3,521 vehicles in April-June period, over the 2,975 units sold during the same period last year. Furthermore, the company also had the best-ever June sales with a 40 per cent growth achieved over June 2016.
This year the company also marked the brand's highest ever half-yearly sales, which went up by 8.7 per cent with total sales accounting to 7171 units against the 6597 units sold during the corresponding period last year, he added.
Referring to Kerala market, Folger said the State accounts for seven per cent of total sales and of this 50 per cent of the contribution was from Kochi, which has evolved into a potential market for luxury and performance cars.
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