Monday, December 26, 2011
By Manoj Kumawat
Audi, BMW, Mercedes CBUs price slash soon
Come few months from now and you can own an Audi A7 or any other completely unit (CBU) car for forty percent less. But, for it one has to keep fingers crossed as the European Union and India Government may enter into a Free Trade Agreement soon following which the import duty on CBUs will be slashed by forty percent or so.
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There is a whole fleet of cars in India that different car companies import as CBUs. Three carmakers import highest number of cars in India. Where Audi imports as high as nine cars including Audi A7, Audi A8, Audi S8, Audi Q7, Audi R8 and Audi RS5, Mercedes also imports eleven cars as CBU including Mercedes Benz CL Class, Mercedes Benz GL Class, Mercedes Benz M Class to name a few. Similarly BMW imports BMW 5 Series GT, BMW 6 Series, BMW 7 Series, BMW X5, and seven other cars in India as CBU. Apart from these almost all foreign players import some or the other car as CBU as they do not have production facility and setup for manufacturing these cars in India.
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Most of these cars are premium cars and currently there is an import duty of 100 percent on the CBUs. With the slashing of the import duty one can expect that the carmakers will propagate the benefit to the buyers. Resulting which Audi, BMW and Mercedes cars which are CBUs will be lot cheaper.
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Auto experts on the other hand fear that the cut in import duty will fire a cutthroat competition in the auto sector in India and it is quite possible that the domestic players have to face a major blow as it is they who will be the most affected. In addition, it is feared that slashing import duties will discourage companies to install manufacturing plants in India thus; there will be a severe blow to auto industry at large in the form of sharp cut in employment opportunities in this sector.