High Customs duty, GST may hit JLR sales
Luxury car manufacturer Jaguar Land Rover (JLR), a subsidiary of Tata Motors, is expecting a drop in growth this year due to the hike in customs duty on components and imposition of high goods and sales tax (GST) rates on the premium segment, managing director of JLR India Rohit Suri said.
The impact of customs duty hike on vehicle parts and kits by five per cent would raise prices ranging between 3.5 per to five per cent across the various models of JLR, he said.
“The hike in customs duty as announced in the budget was really disappointing. This will have an adverse impact on the company’s growth in 2017,” Suri added. “We were expecting a double digit growth in 2018. But the customs duty hike would depress it down to a single digit.”
In 2017 JLR sold around 4,000 cars in India, registering a 49 per cent year- on-year growth over 2016, Suri told reporters on the sidelines of a showroom launch in Kolkata.
In the total company sales, the share of Jaguar sedan and sports uitlity vehicle (SUV) Land Rover was almost 50:50, he said.
Further, Suri termed GST rates of 50 per cent on SUVs and 48 per cent on sedans inclusive of cess as too high.”
JLR’s product portfolio in India comprises 11 models. The vehicles in the country are are priced between ~4 million to ~16 million. JLR, stared operations in India four years ago. The car manufacturer had a low-volume manufacturing plant in Pune.
In the Indian market, it is pitted against other luxury brands including Mercedes, BMW, Audi and Porsche. It has a market share of 11 per cent in the luxury car segment.
Asked about the probable launch of electric vehicles in India from the JLR stable, Suri said “In India, we have to see whether the infrastructure support including charging points to support electric vehicles exist or not.”
He added that the company has the electric vehicle technology. In fact, JLR showcased electric vehicle technology and an electric vehicle called, I-Pace, at this year’s Geneva Motor Show.