The government of India relaxes import norms on cars, so what does that mean?
There’s some good news for car lovers in these days of doom and gloom. The government of India has relaxed its import norms on cars. The bad news is that the import duty structure still stays the same. So why should we rejoice?
The significant change is a clause that has been a bone of contention for auto enthusiasts and manufacturers alike. Until now, an individual, importer or manufacturer had to import cars from the country of origin. This was seriously detrimental to manufacturers whose country of origin was A and who manufactured cars in B, yet couldn’t import them because they didn’t fulfill the country-of-origin requirement or didn’t meet European emission standards.
That now changes, with the government doing away with this clause. From now, manufacturers, importers and individuals alike can import cars from any country, irrespective of its origin. This means any car priced above $40,000 with a petrol engine of 3000cc and higher or a diesel engine of 2500cc and higher can be imported from a country other than its origin, and continue to be outside the gambit of homologation, provided it meets European emission norms. So BMW can now import all variants of the Z4 sports coupe from the US that satisfy these conditions, while Mercedes-Benz can import its ML550 and ML AMG variants from Tuscaloosa in the US. Even Toyota and Nissan could import its Lexus and Infiniti range from the US rather easily, a hint that they could be in the offing.
The biggest beneficiaries, however, are the scores of importers. No longer do you need to import a Porsche 911 Turbo from Germany. With several wholesale distributors in Scandanavian and East European countries benefitting from discounts, Indian importers can now take advantage and acquire cars cheaper than before. What’s more, if these benefits are passed on to the end user, it will mean a lower price tag and lower excise duty bill, resulting in a “cheaper” car for you and me. It also gives buyers the freedom to now spec the car according to their choice and avail of options that were not available previously because they were specific to those markets alone.But more needs to be done.
For one, import duties still need to come down. With the current import norms tailored for low volume, high-value cars, it makes sense for the government to extend its largesse, since it won’t impact the local producers one bit. There’s also need to consider the case for manufacturers of alternative technologies like hybrids and fuel cell cars who could do with minimal or no duties to allow the spread of such vehicles that will eventually help manufacturers localise green technologies eventually. But for now, more options for the Nissan GT-R is something we like.
Source : Business Standard