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Lexus, Infiniti India launch plans put on hold
Posted on 24 Aug 20128,310 Views Comments
According to industry insiders, Toyota and Nissan are reviewing their decision due to uncertainty over India's trade talks with the EU among other reasons
Japanese carmakers Toyota and Nissan have put the brakes on their plans to launch luxury brands Lexus and Infiniti in the country, partly because India's free trade negotiations with European Union may make German rivals BMW, Audi and Mercedes much more competitive.
Toyota had last November announced its plans to drive in Lexus next year, while Nissan announced its intention to launch Infiniti range in March this year. Related: Toyota to unleash Lexus in India in 2013
"Currently we are reviewing our business model and no decision has been taken on the model range to be launched. There could be some direction by the end of the year," Sandeep Singh, deputy managing director of Toyota Kirloskar, said.
Industry insiders say Toyota and Nissan are reviewing the situation due to increase in import duty, the slowdown in demand, free fall in rupee valuation and, most importantly, uncertainty over India's trade talks with the EU.
"Japanese car makers maybe holding back their launch plans owing to the decision on the free trade agreement with the EU," VG Ramakrishnan, senior director, automotive practice, at Frost & Sullivan, said. "There needs to be clarity so that decision on volumes, investments can be made," he said.
The European Union has sought sharp duty cuts on fully built cars under the FTA and media reports indicate that India may slash customs duty on a certain number of cars imported from Europe to 10%-30%.
At present, India charges 60% or 75% customs duty on fully built cars depending on price and power. Including countervailing duty, sales tax and other cesses, the effective duty on imported cars ranges from 135% to 157%.
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