Union Budget 2013: PC slams brakes on Mercedes capital Punjab

LUDHIANA: Opulence-crazy Punjab, where farmers swap fields for roaring SUVs and 30-something CEOs inherit family business with a fleet of sedans, will lead the plunge in sale of luxury carmakers after the customs duty on imported cars was hiked from 75% to 100% in the Union Budget on Thursday.
Nearly 2,870 units out of 10,870 imported cars in India, including BMWs, Mercedes and Audis, were sold in Punjab alone in 2012.
India's flashy rich people from Punjab's Ludhiana and NRI-dominated Jalandhar have flooded the luxury car market, announcing the country's growing wealth on its roads over the past 10 years. Besides, the SUV market in north India grew by 60% compared to the 30% in the rest of the country. Sale of SUVs in Punjab and Chandigarh grew by 58% in the past six months, almost double the sales growth nationwide during the same period.
On Thursday, the leading auto dealers of both SUVs and imported cars looked a worried lot. "Ownership of vehicles is a part of necessity. The application of SUVs is multi-purpose. Traders use it for goods and young entrepreneurs use it for work, family outing and entertainment. The new duty cost will lower the demand," said Rishi Dada, director, Dada Motors in Ludhiana.
His dealership had alone sold more than 350 SUVs in the last quarter. According to a Confederation of Indian Industry-AT Kearney report, India's luxury car market was worth $5.8 billion in 2011 and is expected to treble by 2015. According to industry estimates, the market for super-luxury cars priced at Rs 1-2 crore stood at around 250-300 units in 2011, and the segment is expected to grow at over 50% with eight new models being launched in 2013 and many brands like Aston Martin, Ferrari and Maserati planning to set up base in India.
"This is a pessimistic approach by the government. Not only the consumers will be hurt but government too will lose on VAT," said a leading dealer of Mercedez-Bens in Chandigarh.
Union Budget 2013 > Budget news 2013 > Economic Survey