Audi India Head Says Cars To Get Cheaper By 5-6% Under New GST Rates — Profit Exclusive
"The moment you have pricing which is going down, you have more customers buying your car," Audi India's Balbir Singh Dhillon said.
In a good news for high-end vehicle buyers, Audi's cars will get cheaper by 5-6% under the new GST regime, which will come into effect from Sept. 22. "Once the new rates are implemented, the prices of our cars will go down by 5 to 6%," said Audi India Head Balbir Singh Dhillon, in an exclusive interview with NDTV Profit.
"Obviously there is always a price elasticity. The moment you have pricing which is going down, you have more customers buying your car," he added.
Dhillon said that the GST Council's decision of flat 40% tax on big cars was a positive step. Currently small cars attract 28% GST plus 1% cess. On big cars, along with 28% GST, a cess of 17-22% is also applicable, taking the overall GST outflow to 48%.
Under the prevalent rates, high end cars attract a cumulative tax of around 50%. The new rates, set to be implemented from Sept. 22, will make luxury cars significantly cheaper.
"The luxury space used to see the highest GST plus cess, but this is a very positive step. Not only will it improve the pricing for our customers, but also widen the base that we can represent now," added Dhillon.
On Sept. 3, the GST Council decided to give a big boost to car sales by fixing a 40% tax on cars bigger than 1200 cc engine or above 4,000-mm length.
Dhillon underlined that this tax reduction will lead to more savings for buyers and will help in increasing demand. He also feels that economic growth in India will increase the demand for automobile, and will help to grow Audi's business in the country.
Audi India currently has no plans to launch smaller engine cars in India. "At this point, we do not have the cars in our global portfolio which are going less than 1.2 liters. We will remain to be in the higher-end segment, so we'll continue to be working in where the GST is 40% for now," the Audi India head said.
Dhillion, while commenting on the reduction in GST on automobile parts and components to 18%, said this will lead to a "double benefit" for customers. "Not only the pricing of cars comes down, but the cost of repairs goes down south as well."
The company, which has 64 touchpoints, is gearing up to welcome home buyers. "We are seeing positive growth in enquiries and we will see a double benefit. At one end there will be demand from festive season and on the other end, there is a pile up of potential buyers," Dhillon said.
In Q1FY25, Audi India reported a 17% YoY growth with 1,223 retail units sold. The company sells 12 models in India which includes both ICE and e-vehicles. The company's portfolio includes Audi A4, Audi A6, Audi Q3 Sportback, Audi Q5, Audi Q7, Audi Q8, Audi S5 Sportback, Audi RS Q8, Audi Q8 e-tron, Audi Q8 e-tron Sportback, Audi e-tron GT and Audi RS e-tron GT.
