Luxury Car Prices About to Drop by Sam Kligman

http://timesofindia.indiatimes.com/business/india-business/Luxury-car-prices-set-to-drop-dramatically/articleshow/19643493.cms

This article’s focus was on the impact of India reducing its customs duty to 30%. At the present, cars over Rs 22 lakh ($40,000) have a 100% customs levy and those below that price have a 60% levy. Indian Lamborghini head Pavan Shetty said that this will “surely expand the market, by at least double.” Therefore, it is seemingly in India’s best benefit to reduce the trading blocs it has with countries that it is supposed to have a free trade agreement with.

But what will be the impacts on the domestic carmakers? It might be that there is enough demand for both the new luxury cars and those made in India but it is my guess that domestics will take a hit for this. However, I think from a consumer standpoint this is good because it will force incumbent Indian car manufacturers to start designing better cars for the same prices in order to be competitive with the surge of rivals. It would seem that Indian government officials agree for the article ends by saying they feel “that the auto industry cannot be given an indefinite protection by maintaining high tariff walls.”

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