NEW DELHI:
This could be one of the best times to bring home your favourite luxury car. A Maybach, one of the most luxurious cars in the Mercedes-Benz line-up, will be in your garage for as much as Rs 7 lakh less compared with few days earlier if you are a buyer in Delhi.

A number of other India-made luxury vehicles have also become lighter on the pocket, as manufacturers offer benefits ranging from price reductions and attractive financing schemes to complimentary insurance and services to keep sales momentum going ahead of GST implementation, which is expected to reduce the tax levied on the segment.

The companies want to lure prospective buyers who could delay purchases expecting a price cut when GST comes into effect on July 1. That could hurt sales in the interim. Mercedes-Benz on Thursday cut the price of the entire range of ’Made in India’ vehicles by an average 4% to cover the difference between the current ex-showroom prices and the expected price after the GST rollout.

Fellow German firm BMW has a slew of benefits on offer since May 19. Apart from the price benefits in accordance with new tax rates, BMW is offering customers financing at 7.90%, complimentary service and maintenance of three years, free insurance for the first year, and assured buyback for up to four years.

  "Companies are adjusting prices by effecting discounts in transaction prices to maintain sales momentum," a senior industry executive said. "The offers and the adjustments are being made to ensure that customers do not hold up purchases till the time GST is implemented."

The GST Council last week decided to put cars and SUVs in the highest tax slab of 28%. On top of that, there is a cess — 1-3% on small cars and 15% on large vehicles. The current levies on luxury vehicles are as high as 55%, which means an up to 12% drop in tax incidence on this segment. Manufacturers see GST as longterm positive.

"We strongly believe that GST will strengthen and foster growth in the country and benefit consumers at large," Vikram Pawah, president of the BMW Group India said.

"We are confident that our customers will enjoy value-enhanced benefits such as a lower rate of interest, assured buyback and complimentary service and insurance in addition to the GST benefits."

At Mercedes-Benz, the price revision will be effective immediately on nine models assembled in India — CLA, GLA, C-Class, E-Class, S-Class, GLC, GLE, GLS and Maybach. The offer is aimed at providing value to a customer’s purchase decision before GST implementation, it said. The 4% weighted average price reduction varies between 2% and 9% by state, and is dependent on the current tax structure and local body levies compared to the new GST structure.

"From the price perspective, there is quite a significant difference. The implementation of GST will benefit the economy and therefore also our industry," Mercedes-Benz India managing director Roland Folger told ET. Mercedes-Benz is reducing the transaction prices immediately to pass on the benefits to the customer at an early stage, he added.

The company, which records nearly 43% of its sales from Delhi and Mumbai, said the price reduction will be in the range of Rs 1-7 lakh in these two cities. In Delhi, for instance, the Maybach will now cost Rs 1.80 crore, compared with Rs 1.87 crore previously. The CLA 200 CDI, which cost Rs 32 lakh, will become cheaper by Rs 1.4 lakh, while the prices of the E-Class and GLC SUV both have been reduced to Rs 48.5 lakh from Rs 50 lakh.

Audi India didn’t provide details of any current offers and said it was still studying the impact of GST to understand the final effect on vehicle price due to the complexity of the value chain.

"However, we are confident on the business development in May and June," said Audi India head Rahil Ansari. "We see quite some traffic in the dealerships due to the competitive offers we have launched in sales and service."

 26 May 2017, 05:16 AM