Taking a side with Tesla, Mercedes-Benz has described India’s high duty on imported cars as “outrageous” and demanded for a reduction in taxes. The leader of luxury cars argued that customers would get penalized by buying the cars at double to what buyers in the United States and other countries pay.
Martin Schwenk, MD, Mercedes-Benz, India, told ToI that import duties in India are extremely high and should be reduced immediately to help develop the market for new cars that carry global technologies. “Please remember that currently it is not possible to localize new technologies, including electrics, in India due to the low level of sales volumes that we have here,” he explained. “We can’t get customers at these duty levels. I support the demand. My own submission is that duties should be reduced for all kinds of high-technology luxury products, and not just for electrics.”
India, currently, imposes 100% duty on fully imported cars with Cost, Insurance and Freight (CIF) value more than $40,000 and 60% on those costing less than the amount. Schwenk said this is a real hurdle for developing the market, whilst duty in most international markets is around 10%. “Finally, it’s the Indian customer that gets penalized. I sell the same car at half the price in the US. The tax burden in India is very high and slows down the growth.”
Elon Musk, Tesla CEO, in a Twitter interaction in July had said his company is ready to set up factory in India, but first wants a temporary relief on import duty which he termed as “the highest in the world”. “If Tesla is able to succeed with imported vehicles, then a factory in India is quite likely.”