High Tax On Luxury Cars Restricting Market, Preventing Local Assembly Of More Models: Jaguar Land Ro

The auto industry has been going through a slump in volumes since the past eight months and sales continue to remain disappointing as we move into the ninth month of this de-growth. Luxury carmakers have been equally affected by the slowdown and manufacturers collectively asked for relief in the GST rates that might work as a short in the arm for the Indian auto industry. Elaborating on the same, a recent report states that Jaguar Land Rover is open to assembling more models in India, provided the tax structure is "reasonable" and allows for a viable business case.

Also Read: Stop Calling Luxury Cars As Sin Goods; Reduce GST: Jaguar Land Rover

Jaguar Land Rover India President and Managing Director Rohit Suri was quoted by the PTI saying, "We already have six locally assembled models now and we would love to do more, provided we have a business case for them. That is where the whole questions come down to as how much volumes can we do. If the volumes are good, it leads to better business viability."

At present, luxury cars attrract the top most GST slab of 28 per cent along with a 20 per cent additional cess on sedans and 22 per cent on SUVs. This takes the total tax to 48 per cent and 50 per cent respectively. With the decreasing sales and rising inventories, manufacturers did ask the government to reduce the GST from 28 per cent to 18 per cent, as a temporary measure that would help the industry from the slowdown. An announcement was expected in the Union Budget 2019, but it were the electric cars that have received maximum benefits.

The report further states that JLR India is eager to bring more cars and make them in India, but the high taxation is a major hurdle. "We strongly feel high taxation today does not allow the market to grow and therefore, restricts us from bringing more products that are locally made," he said.

Adding further, Suri said, "Demand for our cars is very strong and it can become much stronger if the taxation is slightly more reasonable. We are not saying that its should go down to zero but it should be more reasonable, then it helps the overall industry."

With respect to expanding its network in India, Suri said that the market remains constricted with high taxation. If the market expands, the compay would expand its operations as well. A new dealership generates employment for around 200. JLR currently has 27 dealerships in India with the latest outlet opened up in Bengaluru earlier this month.