The prices of luxury cars being slashed by a whopping margin of 10-30 lakhs, is sure to provide an impetus to the market sales in India. The attempts of these car makers of repute to come forward and assemble cars locally, by ensuring the arrangement of various vital parts including the engines from within the country has further resulted in a positive phenomenon of price deduction. In this context the custom duty has come down to 30% as against the 100 % custom duty that was once accompanied with the import of fully built luxury cars.
Jaguar has managed to trim 25 lakhs of the XJ Sedan which brings its cost down to 91 lakhs only, completely on the grounds of locally assembling it. Similarly, BMW X5 witnessed a10 lakh reduction from its prior price of 80.60 lakhs.
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Mercedes S Class S500 will now be available at 1.36 crore thereby, slashing 30 lakhs from its previous price only on grounds of localized production. Furthermore, Audi Q7 on account of lower taxes from Feb’14 saw a decline in its price from Rs 82.11 lakhs to Rs. 78.28 lakhs.
“The cost of purchasing has decreased but the maintenance will still be high which might not encourage a lot of people to go for these luxury cars,” stated Abhishek Jain, General Manager of Reliance procurement, Bangalore who just bought a Mercedes Benz C-Class.
This has also motivated companies like Honda which rather than importing its CRVs from Japan has started assembling it locally. The move will clearly result in a decline of the imports in the automobile sector, in India. On the other hand, following a decrease in price, the demand of luxury cars is going to swell by a considerable amount.
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“The demand will surely increase if the performance of the car continues to be the same. But the domestically arranged parts should be equally efficient to ensure that increase in demand,” said Beenu Rampal, a Delhi based restaurateur who owns a luxury car and is planning to buy a new one.
Such a significant reduction has further lead to a number of discussions by analysts envisaging as to how prices will play an instrumental role in strengthening the customer base and bringing a significant change in the market sales in the larger context.
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