This April Fool’s day, car buyers are set to get a jolt, as their plans to purchase a new car might take a back seat. The double whammy of increase in custom duty and hike in input costs will directly impact the car prices, resulting in a significant increase in cost. Some of the companies have already announced price hike on their entire range effective April 1, 2018.
While the custom duty increase will mostly impact imported cars or cars that are built using imported parts, carmakers have also decided to pass on the increase in input costs to the consumers. The custom duty on all imported CBUs has been hiked by 5 per cent, which now stands at 25 percent compared to the previous 20 per cent. The idea is to probe carmakers for localisation in line with government’s ‘Make in India’ program, that will in turn create more job opportunities in the country.
As an impact of the hike in input costs, Tata cars will witness an increase of up to Rs 60,000 (depending on the model) from the new fiscal. Currently, Tata retails Nano, Tiago, Bolt, Tigor, Zest, Nexon, Safari Storme and Hexa in India.
The German based luxury car giant, Audi will also revise pricing of its range by up to Rs 9 lakh owing to the re-framed custom duty and introduction of social welfare surcharge in lieu of an education cess in the Union Budget. Audi sells a wide range of best luxury cars in India and it recently showcased 2019 Audi A6 at the 2018 Auto Expo in Greater Noida.
Among the several carmakers who have announced price hike across range effective April 1st is Nissan which is set to increases car prices by up to 2 per cent. Its low-cost brand, Datsun will also rejig pricing across its product portfolio in India. While these automakers have officially announced increase in prices, rest are expected to release an official statement soon. The exact model wise break-up for the cars across brands is expected to be released after April 1st.
This would eventually thump car sales with customers postponing their new car purchase plan. With cars set to get dearer it makes sense to expedite the car purchase process to save the additional cost incurred due to the revised custom duty and hike in input cost. Customers who have already decided on the model should go to their nearest dealership and book the car before the new financial year begins from April 1st. For those who have not decided on the model yet should hustle up and book the car before it gets pricier. Most of the impact will be on the luxury models, hence it is an ideal time for those who are planning to buy a luxury car to book the model or make a purchase.While car sales are forecasted to head downwards, it is remains to be seen how much impact it will have on the luxury cars and volume models.
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