Audi’s cars will be cheaper under India’s new GST system, which starts on September 22. This is fantastic news for anyone who love high-end cars. Balbir Singh Dhillon, the head of Audi India, said that prices will go down by 5–6% once the new tax rates go into effect.
Dhillon told NDTV Profit in an exclusive interview that he strongly supports the GST Council’s decision to charge a flat 40% tax on big autos. The present total tax rate is about 50%, which includes a 28% GST and a 17–22% cess. This new rate is a big drop from that.
“Of course, there is always a price elasticity.” “More people will buy your car when the price goes down,” Dhillon said. “The luxury space used to have the highest GST plus cess, but this is a very good step.” It will not only lower prices for our clients, but it will also provide us a bigger base to work with.
The GST Council’s decision on September 3 to set a 40% tax on cars with engines larger than 1200 cc or lengths more than 4,000 mm is good news for the whole automotive industry. Dhillon said that this tax cut will help purchasers save more money, which should lead to higher demand. He also thinks that India’s overall economic growth will boost the demand for cars and assist Audi’s business thrive in the country.
Dhillon also pointed out another big benefit for customers: the GST on car parts and components has gone down to 18%. He said this was a “double benefit” because it would not only make cars cheaper, but also make repairs and upkeep cheaper.
Audi is expecting a lot of new customers because it has 64 touchpoints across India. Dhillon said, “We are seeing positive growth in inquiries, and we will see a double benefit.” “On one end, there will be demand from the holiday season, and on the other end, there will be a lot of potential buyers.”
Audi India has no intentions to update its lineup, even though the new tax structure is better for cars with smaller engines. Dhillon said, “At this point, we don’t have any cars in our global portfolio that have engines smaller than 1.2 liters.” “We’ll stay in the higher-end market, so for now we’ll keep working where the GST is 40%.”
Audi India had a good year-on-year growth of 17% in the first quarter of FY25, selling 1,223 retail vehicles. The company sells a lot of Internal Combustion Engine (ICE) and electric cars in India, like the Audi A4, Audi Q7, and Audi e-tron GT.