Luxury Car Market After GST

BMW India CEO says gradual five-year import duty cuts under new FTAs create buyer hesitation and urges government to announce year-wise rates instead

Luxury car makers were on a roll during the first two months after the Goods and Services Tax (GST) was implemented in July, thanks to a reduction in tax rates. Leading brands like Mercedes and BMW clocked high double digit growth during the July-September quarter following the GST-led cut in tax and price from July. The quarter also happened to be the best ever for some of the players. That high growth has, however, slowed down after the cess on luxury cars was increased in September. "With the increase in cess from September onwards, the prices leaped back to the pre-GST regime, and it affected our October sales. From November onwards the sales are back to our earlier estimates," said Roland Folger, managing director and chief executive officer at Mercedes Benz, country's largest luxury car maker. The company had clocked a 41 per cent growth in July-September period to sell 4,698 cars. Folger did not share the growth rate witnessed so far in the October-December quarter but it is ...