Luxury cars, bikes to become expensive

“Premium and luxury cars will become costly. Most new cars are launched through CKD route, which means new cars will become expensive too,” said Vishnu Mathur, DG, Siam. Makers of high-end cars usually import engines within CKD kit, whereas other parts from the CKD kit come dismantled to the country. The engine forms 15-20 per cent of a car’s cost.

Jnaneswar Sen, VP, Honda Siel Cars India, said it wouldn’t impact their Accord sedan, as its engine is assembled in the country. Sandeep Singh, deputy MD (marketing) at Toyota Kirloskar Motor, which assembles Fortuner and Innova, refrained to comment saying it was unclear whether the customs duty was raised. This will also affect CKD models like Bajaj Auto’s Ninja 250R. Harley Davidson that announced CKD operations of its bikes in India is likely to be impacted. NK Rattan, operating head - sales, HMSI, said its soon to be launched sports bike CBR250R CKD model remains unaffected as it makes engines in India. “In India, assembling models through CKD is not a good idea to generate volumes. More firms are expected to start local manufacturing in view of this announcement,” Abdul Majeed of PriceWaterhouse Coopers said.

Besides, small cars registered as taxis will get 2 per cent price benefit as refund has been extended to 20 per cent from 10 per cent under the taxi refund scheme.