Audi ready to take import duty hit on A4 model

The company, which will start local assembly operation for the A4 at its Aurangabad facility by December this year, will import the vehicle as a completely built unit (CBU) starting this month, said top company officials.

 Martin Birkner, V-P (marketing), Audi India, said, "We want to make the A4 very affordable to the buyers. Hence, we do not want to have a huge price difference within the matter of months when the car will be locally produced. It does not make sense to lower the price just after 6 months of the models' launch".

The A4 is the cheapest Audi in the country, costing Rs 29 lakh for the diesel version, and will be assembled at the sister company Skoda's facility at Shendre in Aurangabad. The semi knocked down (SKD) kits of the car will be imported directly from Germany, the company's home country.

Currently, an SKD kit attracts a custom duty of almost 62 per cent as against a consolidated duty of more than 110 per cent on the CBU unit (fully imported).

A completely knocked down (CKD) kit attracts a duty of just 10.3 per cent. The A4, which would carry a price tag of about Rs 36 lakh as its full import cost, will however be sold for just Rs 29 lakh for atleast 5 months till December.

The calculations are based on the assumption that the car's base price is close to Rs 18 lakh. The company expects India's luxury car market to grow around 200 per cent in the next few years.

Luxury marques such as BMW registered a sales growth exceeding 630 per cent at 2162 units and Mercedes saw a growth of 41 per cent at nearly 2900 units, in the last financial year.

The company is committed to another Indian launch next year, its sixth offering to a market where it already sells A4, A6, A8, TT Coupe and Q7. The company is confident of selling 1,000 units of the new A4 in the next 12 months, with 300-400 units in this calender year itself.