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Audi facing trouble in India: Luxury car market remains suppressed in India due to high taxes

Audi facing trouble in India – The luxury car market remains suppressed in India due to high taxes: A senior executive of German luxury car maker Audi has said that the Indian luxury car market has immense growth potential, but it is held up due to high taxation on luxury cars and an unfavorable regulatory environment.

Luxury car sales account for less than 2 percent of total passenger vehicle sales annually and the sector has remained at this level for the past decade.

He said the luxury car segment remains “under-represented” despite having so many millionaires in the country.

Waldenburg-Dressel, based out of the company’s headquarters in Germany, said the country lags behind other Asian countries in terms of growth in sales of luxury cars.

Audi facing trouble in India: Luxury car market remains suppressed in India due to high taxes

He then said, “I have been working with the Indian market for five years. I have seen many forecasts and then what turned out to be reality.”

Waldenburg-Diesel said it was frequent changes in policies and high taxation on luxury cars that were hindering the growth of the segment.

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He said, “Looking from the outside, I have to admit that it is the policies, which make life a bit difficult for us. And the duties are higher than in other countries.”

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Luxury vehicles currently attract a top GST slab of 28 percent with an additional cess of 20 percent on sedans and 22 percent on SUVs, taking the total tax to 50 percent.

Audi India head Balbir Singh Dhillon further elaborated: “I believe it (luxury car segment sales) is suppressed due to taxes, levies on charges, and registration cost.”

The luxury car segment had crossed the 40,000 unit sales mark a few years back and currently remains at the same level.

“The kind of road infrastructure that is being created, motorization is only going to increase. And the younger generation is not afraid to spend, so all this helps in boosting the luxury segment,” he said.

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The company is bringing the latest globally available products to customers in India. The company has already introduced two new products in the country this year – including the A8L luxury sedan.

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