Luxury car enthusiasts in India have temporarily hit the brakes. Following recent discussions about a potential trade deal between India and the UK, many wealthy individuals in the country have cancelled their bookings for foreign cars. This is directly impacting luxury car dealers, who have already placed orders with manufacturers and are now facing empty showrooms instead of eager buyers.
Bookings on Hold Due to Anticipated Tax Reduction
Currently, imported cars from the UK face import duties ranging from 75% to 125%. However, the proposed trade deal between India and the UK could reduce this tax to as low as 10%. As soon as information about this deal surfaced in May, a significant number of customers put their bookings on hold. Some even cancelled bookings for which they had already paid an advance.
British Car Brands Most Affected
The car brands that are directly manufactured in the UK are most affected by this deal. These include names like Jaguar, Land Rover, Aston Martin, Bentley, Rolls Royce, and McLaren. While Jaguar and Land Rover are now owned by Tata Motors, their manufacturing units are still located in the UK.
Dealers Cite Uncertainty as the Problem
Many luxury car dealers across the country state that this situation has put them in a dilemma. A major dealer said that they have already ordered the vehicles, but now customers are backing out. The dealer says, "We don't know when this trade deal will be implemented and whether its impact will be immediate or gradual. Until these things are clear, customers have decided to wait."
Customers Understand the Price Difference
The price of British cars in India is up to three times higher than in the UK. This is due to hefty import duties, state-level local taxes, and registration charges. Therefore, as soon as the possibility of tax relief emerged, people started thinking that it is better to wait a little while rather than buying an expensive car now.
Dealers Trying to Explain to Customers
However, efforts are underway to manage the situation. Dealers are explaining to customers that the tax reduction will not happen immediately. They are being told that it may take up to a year for the agreement to be implemented and that the tax will not be reduced all at once, but gradually. Additionally, it is also being pointed out that the price of luxury cars increases by about 5% every year, and the value of the rupee is also weakening against the pound. In such a situation, buying later could be more expensive.
Impact Also Seen on Brands
This changing situation has also affected the strategies of brands in India. Some companies have postponed the delivery of the next consignment for India. At the same time, some have refrained from taking new orders for the time being.
Deal May Take a Year to Implement
According to experts, it may take at least a year for this trade deal between India and the UK to be fully implemented. It will also be decided how many cars will be given tax exemptions each year. This benefit will be available in limited quantities.
Delivery of Vehicles May Also Be Delayed
Another impact of stopping bookings is that when the agreement is implemented, demand will suddenly increase and there may be delays in delivery. Also, the price of vehicles will have increased by then.
Dealers Keeping an Eye on Market Trends
Luxury car dealers across the country are currently working very cautiously. They are maintaining communication with customers and trying to minimize losses until the deal is implemented. However, many customers are still in a dilemma regarding their bookings.
No Fixed Date Announced by the Government
Currently, the Indian government has not stated when the trade deal will be implemented or what its terms will be. This is causing uncertainty for both dealers and customers.
