India may be the world's most diverse and biggest market but the luxury spending in its markets is far less. This may be due to the import duties levied on luxury products is huge in India especially on imported luxury cars and bikes.
In India, the on-road prices of super-luxury cars are 150-200 percent higher than the ex-factory prices after including the customs duty, taxes, and registration costs. There have been demands by luxury carmakers to reduce tax rates, as they believe it will not only grow the market but also increase tax revenues for the government. Matteo Ortenzi, Asia Pacific CEO of Italian super-luxury sports carmaker Lamborghini believes India is in a high taxation range for luxury cars. Despite high taxes, growth potential is seen in the Indian market but is apprehensive about frequent changes in the tax structure. "the business strategy goes for a toss if the tax structure changes continuously, " he says. "We have a wait-and-watch approach to taxation changes in various countries. The Indian market has huge potential if tax rules don't change every year," Ortenzi adds.
Our focus right now is to sustain the growth that we have achieved in the Indian market and keep increasing the excitement level among customers. The vision is to be a brand that supplies a car less than the demand. If there is a favorable economy and market and consistency in taxation, we will achieve tremendous volume growth in the next three-five years," said Agarwal.
Tags : luxury goods, cars and bikes, super-luxury cars, Indian market,