[FlyingSpur]

Originally Posted by S350L-E240

...and those who need expensive niche products can and will always pay the required duties.

Why should they have to?

[Car Fan]

Reducing the discrimination against CBU imports is all very fine, but let's not harbour any illusions about cheap cars in India. For reasons to do with both the environment and poor infrastructure, the government should and will keep the overall incidence of taxes on cars high. A carbon tax for instance is likely in the coming years.

In fact they should specify a portion of the revenues from car taxes to go to public transportation, which is the only way to reduce the demand for cars in the long run. So if you have good public transportation, you will have less congested roads and a better quality of life.

[AlokSriva]

Originally Posted by Car Fan

Reducing the discrimination against CBU imports is all very fine, but let's not harbour any illusions about cheap cars in India. For reasons to do with both the environment and poor infrastructure, the government should and will keep the overall incidence of taxes on cars high. A carbon tax for instance is likely in the coming years.

Oh really? The intent doesn't reflect though in the way hybrids are taxed/promoted by the GOI.
Neither does it reflect in the way State has been promoting adoption of alternative sources of renewable energy..

In fact they should specify a portion of the revenues from car taxes to go to public transportation, which is the only way to reduce the demand for cars in the long run. So if you have good public transportation, you will have less congested roads and a better quality of life.

Pray, where does such revenue go today?

[kcstheg]

Another thing to consider is that quite a few of the existing cars are over-priced due to their notional brand value (not that they are all hugely successful, but over-priced)

With reduced taxes, we would get rightly priced cars and obviously more options to choose from:
Consider a CR-V for instance. It costs (close to) a whopping 25L rupees on-road. Similar spec car in the US are available for about 22000$ ( <10L INR). The prices are way beyond the 106% calculations.

As far as increase in the number of cars sold being affected is concerned, i don't believe so. Most of the cars sold today are locally manufactured and small. Lower import duties would make a Porsche cheaper, not an Alto or a Santro.

[FlyingSpur]

Originally Posted by kcstheg

It costs (close to) a whopping 25L...

Beyond, actually talk about digging their own grave.

[theEnd]

Originally Posted by AlokSriva

What's misleading about the title? Do let us know and also, do suggest a correct title and we can request mods to oblige.

It should read "Import Tariff on CBU/CKDs should be reduced". Currently, if you see the title you think that such a move is actually been announced by the government. False hopes.

The thing with protectionism in this age of globalization is that it only makes sense to protect those sectors or industries where you think your own country has a very good chance of building a competitive advantage over other countries. Its clear that the only part of the automobile industry that India has a chance to build a global presence in is at the very bottom end. After over 60 years of protectionism, the only Indian-made car that has achieved any sort of worldwide recognition (forget success) is the Tata Nano. Our domestic automobile industry can only hope to compete at the bottom end of the price band where it can make cheap, crude and economical cars. Do you really think that local carmakers (Tata/Mahindra/Hindustan Motors/Sipani/Reva) can make luxury cars and sports cars to compete with Mercedes and Ferrari? Even after Tata bought JLR, Jaguars and Land Rovers continue to be made in England.

Taxing mid and upper segment imports is only about socialism. A lot of our politicians (and citizens) still think its wrong to spend too much money. Being rich and living a good life is some sort of sin for these folks. So we have these absurd taxes that go into the hands of corrupt politicians and bureaucrats.

[AlokSriva]

Originally Posted by theEnd

It should read "Import Tariff on CBU/CKDs should be reduced". Currently, if you see the title you think that such a move is actually been announced by the government. False hopes.

Do you really think that the decisions taken by government, policy changes announced by ministers, laws framed by parliament are brain child of dimwit politicians whom we elect and send in the Assembly?

I would rather look at this statement from Commerce Secy as a heads up to the industry for things to change.

If the babu-log (read IAS) in the Commerce ministry are mooting this idea, I am hopeful it would fly sooner or later.

And hence, it is not a question of whether it 'should', rather, it 'would' - matter of time my friend, its just a matter of time

[FlyingSpur]

Personally, I think it was correct that our industry has been protected (it has, whether you admit it or not) for a while. It has enabled our domestic players to reach a certain level and that is surely a good thing. Case in point is the Indica, which after many interations has just been getting better and better. And I'm eligible to make this statement because we've had a DLS from the first batch ever made, then a V2 DLS from the first clear-headlamps facelift period, and are contemplating a Vista MJD. Would Tata have been able to reach this level if they had been ambushed by Polo's and Punto's 5-6 years back? It would have been very difficult.

However, now that our market has (or, I would like to believe that it has) reached a certain level of maturity with focus on quality, reliability and performance, I think it is now time to open the floodgates and bring in the best to compete on fair turf. It need not be done radically, it can be done in a phased manner (gradual duty cuts) but it needs to be done.

What say?

Originally Posted by AlokSriva

And hence, it is not a question of whether it 'should', rather, it 'would' - matter of time my friend, its just a matter of time

I'm quite in agreement wih the thread title. I suppose we can only be optimistic and hope for the best

[tacho]

Originally Posted by AlokSriva

What's misleading about the title?

The exclamation mark at the end suggested to me that the tariff reduction has already been announced or is just round the corner. But the body just shows the secretary asking some rhetorical questions. I didn't see anything concrete

[pgsagar]

Really? Somebody tell me I can look forward to picking up a brand new Hayabusa for 5 lakhs form Suzuki dealer, hehehe.... I know it's a pipe dream right now but if that really happens i will not be able to sleep for a week in excitement. And yes, I will be first in queue with a cheque in hand.

[AlokSriva]

Originally Posted by tacho

The exclamation mark at the end suggested to me that the tariff reduction has already been announced or is just round the corner. But the body just shows the secretary asking some rhetorical questions. I didn't see anything concrete

You really think this is a babu repeating his rhetoric all over again? At least I haven't heard of this ever before.
And for the exclamation mark - (psst.. why is there a restriction of only 2 emoticons!!)

[M00M]

I think it is high time taxes came down, because of a few thoughts, one till how long will they keep protecting - there has to be a time where you draw the line and let the kid fend for itself in the world, second high taxes are harming everybody including the government as if taxes are lowered then more ppl will buy higher cars raising more tax overall for the government, three - with higher taxes no road infrastructure has improved except for a few cases like expressways and sea link but those roads are also not smooth you still have to drive at inclines in certain cases where shoddy cut paste work is done - so the point being there has to be a justification for these annoyingly high taxes what is the justification the GOI going to give in the WTO, fourth that manufacturers were given a chance to prove their competitiveness but it has happened only in a few cases otherwise the car makers are misusing this blessing example crv if taxes are down it will result in better value for the customer if honda actually wanted to make it here it wouldve by now, five - better roads, no cut paste shoddy repairs, need to be introduced to justify high taxes - these are i think a few points and more that i feel.

[MAS]

Just got to read this at Vicky.in

Quote
Indian Auto companies receive alarming indicator from the government

The import tariff protection covered for the automobile and its ancillary units are to be stripped off, indicated the Commerce Secretary. The present structure of import tariff is 106% for Completely Built Units and 60% for Completely Knocked Down units. The import duty on auto components is in the range of 7.5-10%. The government’s move to reduce the import tariff would benefit Japanese and European Union car makers much. India is on the negotiation process with these two countries on Free Trade Agreements.

The secretary hinted that a time has come now for the Indian car makers to raise to the occasion. However, the government does not want to wash away the domestic auto industries under FTA. The next ten years, he added, will be a testing time for securing the good profit and the companies shall focus on it. The government, in the meantime, is fully aware and taking into consideration the rupee depreciation against the auto export sector, cost rise in steel and lack of fund for Technology Upgradation. According to a study revealed by Emst&Young, the export figure of Indian automotive needs to reach %35-42 billion in another six years.

Unquote

If the import duty is stripped-off, it is going to rain imported cars in India + prices of cars with high proportion of imported parts could come down.

I hope this happens sometimes soon.

Mods: If this has already been discussed, please merge the thread.

[k2max6]

Source : HT Delhi

I think its a great move and would benefit the cbu's a lot.
And ofcourse us

[Cyrus43]

I hope this actually happens! As if it does, I can finally get something I have always wanted!!