Who says luxury is unreasonable?

VALUE FOR MONEY: Businessman Karan Talwar prefers a locally assembled car as against a fully imported one.

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New Delhi: Luxury sure comes for a price. But if you think buying a luxury car only means exorbitant money and no scope of savings, think again.

Though the range of luxury cars in India has increased to match higher incomes group’s aspirations, even in the elite segment, majority of buyers feel the pinch of 100 per cent duties paid on the purchase of fully imported cars.

While checking into a Mercedes showroom in Okhla, Delhi businessman Karan Talwar says he will get better, faster servicing with a locally assembled car as against a fully imported one. Being a well-travelled consumer, Karan says he knows what he wants.

“As a car buyer, the customs duty coming down would not affect me so much. If the excise duties were to get 8 per cent lower, that is a straight away 8 per cent saving on a car,” he reasons. Though impressed with the range of cars, Karan is a practical person, thinking about the excise duties.

A common misconception is that people who buy luxury cars are not concerned about the budget. This is not entirely true. Though the small car segment is more sensitive to duty cuts, people buying foreign cars too consider whether to go for a car assembled in India, where the duties will be less, or to go for a complete built-up model.

By all the aggregates, Karan who wishes to buy a luxury car will shell out around 114 [er cent of duty for a fully imported car and around 60 per cent for one that is assembled in the India.

“No matter how deep my pockets are I would still probably think sensibly. I could buy two Indian assembled Mercedes and keep one spare as opposed to buying one expensive imported model,” says Karan.

The E-class that he drives costs Rs 45 lakhs if assembled at the Pune plant and the same car could cost a whopping Rs 60 lakhs if its imported from Germany. Like most countries, India incentivise local manufacturing.

''All cars that were less than 4 meters in length and either had a petrol engine of 1200CC or Diesel engine of 1500 CC carry excise duty of 16 per cent. Rests of the cars were given an excise duty of 24 per cent as it happened in last Budget. This Budget we hope that all cars will carry a uniform excise duty of 16 per cent,” says Dilip Chenoy, Director General, SIAM.

The duty cuts on locally manufactured cars will not only make it more affordable, but also speed up the entrance of more brands thereby giving the consumers more choice.