"Our request is to standardise the taxation structure"
An Audi executive has said that high taxes are limiting the growth of the luxury vehicle sector in India.
The German automaker said that the government should look into lowering the current levies to help the industry’s expansion.
Head of Audi India, Balbir Singh Dhillon noted that luxury models account for less than 2% of all passenger vehicle sales annually.
He also said that it has remained at around the same level for the past decade.
Mr Dhillon explained: “While the volume segments have been growing all these years, the luxury segment went up to 40,000 units a year and stayed in that range and this year we can end up even lower than that.”
He added that the high registration costs in some Indian states along with rising fuel costs could also be reasons for lower ownership levels among citizens.
He continued: “So if this cess part is taken off and also if the registration costs are kept reasonable and same across the country, it will help the segment.”
Luxury vehicles in India have a 28% Goods and Services Tax (GST), with an additional 20% on sedans and 22% on SUVs.
This means that the total tax could be upwards of 50% in many cases.
This is one of the highest rates in the world.
The Head of Audi India now wants to make a request to the country’s government, adding:
“Our request is to standardise the taxation structure because our customers are very well travelled and they know that the same models which we are selling here at higher cost are much more affordable in other countries.”
Mr Dhillon also said that the company also needed to roll out even more than its five imported electric vehicles to impress Audi’s global headquarters.
This would also allow for fresh investments and opportunities for the local manufacturing of cars.
He said: “Once we know that these cars are well accepted in the market, we can go to the headquarters to tell them that we need to now produce locally.”
It comes as Audi already released eight new vehicle models in India in 2021 and will be launching the new Q5 SUV in November 2021.
New petrol versions of other popular Audi models, the Q3 and the Q7, are also set to be launched in the country sometime in the near future.