Mercedes, BMW, Audi, Land Rover, Renault to raise prices

Foreign luxury cars will turn more expensive in India as global auto majors plan to raise prices following an increase in tax on locally assembled cars. Mercedes, BMW, Audi, Land Rover and Renault will soon raise prices of cars assembled in India by up to Rs 10 lakh to pass on the cost increase due to higher tax to customers.

The Indian government recently raised customs duty on foreign luxury cars that are assembled in local facilities to 30 per cent from 10 per cent.

"We are looking at increasing prices for one of our major models in the next few weeks. We would be paying high tax on one of our cars with a high proportion of pre-assembled components. The new policy regulation has forced us to bring in new prices soon," said Peter Honegg, Chief Executive Officer and Managing Director, Mercedes Benz India.

The company plans to raise prices of its top-end S-Class sedan by up to Rs 8 lakh. The S-Class sedan falls in the price range of Rs 84.3 lakh to more than Rs. 1 crore. The new lot of S-Class sedans produced in April will reach the showrooms in 4-6 weeks and will carry a revised price tag, he said.

Audi, BMW, and Land Rover, will also increase prices of its luxury cars assembled in India, company executives said. These cars are in the price range of Rs 30-90 lakh. The increase in tax will hit premium car sales in India. Luxury car sales doubled to 15,000 in fiscal 2010-11 from a year earlier driven by rising incomes and easy financing.