GST Hurdle has Not Affected Luxury Carmaker’s Sales

• Published On: 5 January 2018
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Many luxury carmakers are recording impressive sales figures.

Luxury manufacturers in India are witnessing a rise in sales figures even after the revision in GST rates. During this period, there was a brief time when prices fell and this led to a rise in sales momentarily.

Dominating this growth was BMW; it recorded 25 percent growth, followed by Jaguar Land Rover which saw a 49 percent increase. Sales at Audi’s end however, grew a little at rate of 2 percent. The country’s biggest luxury car maker in terms of sales has still not announced its numbers for 2017.

BMW

The Bavaria-based luxury carmaker, BMW posted sales of 9,800 units in 2017. This is an impressive increase of 25 percent. The figure for the previous year was 7,500 units. The highest selling models for BMW were the X1, X5 and the all-new 5 series. Interestingly, sales at Mini, a subsidiary of the BMW Group, recorded sales of 421 cars, up 17 percent from 361 cars moved in 2016.

Audi

Audi has said that it moved a total of 7,876 cars in 2017, up two percent over the previous year. The German carmaker completed 10 years of operations in India. Audi’s portfolio of car models increased by 10 last year, they launched models like the A3 sedan, A3 cabriolet, Q3, A4 TDI and more. The company is also readying the all-new Q5 for a launch this month.

To add that, the company is also spreading into tier II and tier III cities. Audi plans to make its way into these markets with its ‘workshop first’ method where the manufacturer first provides the servicing facility before sales.

Jaguar Land Rover India

Jaguar Land Rover recently said that it moved 3,954 cars in 2017, up 49 percent from last year. Commenting on this, Rohit Suri, President and Managing Director, JLR India said, “We intend to sustain this momentum in 2018 with the launch of some exciting new products, the new Range Rover Velar being the first off the blocks in January 2018."

GST hurdles

Even though many luxury car manufacturers have recorded decent growth in the previous year, it has been slower than expected owing to the tax revision under GST. This revision has increased the cess on midsize cars by 2 percent. Taking the total from 15 to 17 percent, on large vehicles it has gone up by 5 percent to a total of 20 percent and on SUVs by 7 percent to a total of 22 percent.