With the budget for the financial year April 2012 – March 2013 revealed, luxury cars can become distant dreams even for those who were thinking about buying them. With the proposed increase in the excise duty for imported cars, an average luxury car is going to become more expensive by anything between 20-40 lakh. This is a jump of nearly 20-25 % from their earlier cost price. So, if you want a Lamborghini or a Ferrari, you will have to cough up much more than what you had anticipated.
Even as the sale of cars is getting affected by the increase in taxes, this increase in the cost of imported cars will affect the demand for such luxury cars even if marginally. This might also lead to some cancellations on previously booked cars.
Most of the auto giants like Ferrari, Lamborghini and Maserati have already increased their prices and their company appointed dealers suggest an overall increase of 20-25% in the prices of these cars (after adding the various taxes to it). This sudden increase will stagnate the sales of luxury cars since it’s not a necessity and people can do without it.
Keeping this increase in luxury car prices, Performance Car’s Lalit Choudhary (Aston Martin’s authorized dealer) said, “The demand for such luxury cars will ultimately take a hit. We are talking to our customers regarding the increase, which is in the range of Rs 20-35 lakh for Aston Martin. We hope that the market will absorb the price rise eventually.”
Luxury car companies should start preparing for a dry spell in India since this increase in the excise duty is further going to deplete the demand for imported luxury cars.