German luxury car marker Audi stated that it is offering a limited period customer benefit scheme which includes discounts of up to INR 10 lakh on a few selected models in the country. This is an attempt to overcome the challenges in the market post the import duty hike.
The discounts will range from INR 2.7 lakh to INR 10 lakh on popular models which include A3, A4 and A6 sedans in addition to SUV Q3 until June. Rahil Ansari, Audi India head stated that the stricter importer duties and taxes should not be a reason for a consumer to not be able to afford the dream car.
The custom duty on CKD imports of motor cars, motor vehicles and motor cycles was increased from 10 percent to 15 percent in the Budget 2018-19. Additionally, the government also raised the custom duty on specific accessories and parts of motor cars, motor vehicles and motor cycles from 7.5 percent to 15 percent. This increase in duty has been passed on to the consumers by the luxury car makers. This led to a price hike ranging from INR 1 lakh to INR 10 lakh. Ansari stated that the company was expecting a double digit sales growth for 2018 but due to the hike in the customs duty and a subsequent rise in price, the sales might be flat this year.
The luxury carmaker had sold 7,876 units in 2017 which was up by 2 percent from 7,720 units in 2016. The sales in May and June are usually low due to holiday and Audi India had offered similar discounts last year as a run up to GST implementation. It is undertaking a similar exercise this year. The company will offer customers of selected Audi models to buy in 2018 and begin paying in 2019. Consumers can avail a buyback assurance of 57 percent through the finance solution program Audi Choice. This is a part of strategy to overcome the challenges faced by the company in the Indian market.