It's a bonanza for luxury car buyers. Tata Motors-owned Jaguar Land Rover on Wednesday slashed prices by up to 12 per cent across products from immediate effect. It joins host of other companies who have also announced similar price cuts, passing on the lower tax benefits under the Goods and Service Tax to customers, even though the implementation of the GST is still at least a month away.
Last week, the government finalised tax rates under GST for more than 1,200 items. SUVs and cars with engines over 1,500cc will be taxed at 28 per cent GST plus 15 per cent cess, effectively bringing the total tax on such vehicles to 43 per cent. This is lower than the about 55 per cent tax applicable on such vehicles today, and this is expected to give a huge boost to the SUV market, which is already clocking strong growth. Last financial year ending March 2017, utility vehicle sales surged 30 per cent.
JLR's up to 12 per cent price cut will effectively mean savings in the range of Rs 2 lakh to almost Rs 11 lakh depending on models.
“Implementation of GST is a historical moment for India which will not only benefit consumers but is also expected to make the whole tax regime simpler and more transparent. In support of this initiative by the Government of India, we are pleased to proactively pass on benefits linked to the expected price reduction to our customers with immediate effect,” said Rohit Suri, MD, Jaguar Land Rover India.
JLR joins rivals like Mercedes Benz and BMW who have already announced price cuts across models.
Mercedes, for instance, cut prices on all models that it assembles in India.
“The price revision on a weighted average of four per cent will be effective immediately and is aimed at providing value to a customer's purchase decision before GST implementation,” the German car maker said last week.
The price cuts will vary from state to state in the two per cent to nine per cent range, depending on current tax structure and local body taxes.
Mercedes Benz currently makes nine models in India—CLA, GLA, C-Class, E-Class, S-Class, GLC, GLE, GLS and Maybach S500—all of which will become cheaper with the company passing on the lower taxes in the GST regime.
Mercedes' rival BMW not only passed on the lower GST rates to customers with immediate effect, to give sales a further boost, the company is also offering lower interest rate of 7.90 per cent, one year complementary insurance, complementary service and insurance for three years and assured buyback up to four years.
Audi also slashed prices on its models by up to Rs 10 lakh, applicable till June 30, apart from also offering comprehensive service, financing and insurance packages, attractive rates.
“As opposed to the market trend, this is not a measure to clear old stock, we are extending the benefits on our new cars as well,” said Rahil Ansari, head, Audi India.
