NEW DELHI: Calling the duty on imported cars “outrageous,” Mercedes-Benz – the luxury car leader in India – has backed rival Tesla’s demand for lower taxes, “otherwise customers are penalized by buying the cars double for what buyers pay in the United States and other Western markets. ”
Martin Schwenk, Managing Director of Mercedes-Benz India, said import duties in India are extremely high and should be reduced immediately to help develop the market for new cars equipped with global technologies.
“Remember that it is currently not possible to locate all new technology, including electricity, in India due to the low level of sales volumes we have here. We cannot get customers at those levels of service, ”Schwenk told TOI, seeking reduction in tariffs in line with what Tesla and its founder Musk also requested.
“I support the demand. My only proposal is that tariffs should be reduced for all kinds of high-tech luxury goods, not just electrical appliances,” he said.
In a Twitter interaction in July, Musk said his company was ready to set up a factory in India, but first wanted “temporary relief” from import duties he called “the highest in the world.” “. “If Tesla is able to succeed with imported vehicles, then a factory in India is very likely,” he added, seeking an easier tariff regime first before getting real ones. investments.
Currently India imposes a 100% duty on fully imported cars with a CIF (cost, insurance and freight) value above $ 40,000 and 60% on those costing less than this amount.
“It’s a real obstacle to market development,” Schwenk said, adding that tariffs in most international markets are around 10%. “Ultimately, the Indian customer is penalized. I sell the same car half the price in the United States. The tax burden in India is very high, and slows growth.”
While some sections of the government have been in favor of luxury players’ demands for reduced import duties, the heavy industries ministry – which sets the country’s auto sector policy – is not in favor of the measure.