New Delhi: Ahead of the upcoming interim Union Budget, BMW Group India president Vikram Pawah has said that the carmaker’s wishlist consists of stable policy measures to boost demand and rationalisation of import duty.
“Our ask from the government always is, please keep all the policies stable. Don’t keep on changing it every year because a stable policy means we have a long-term view. This is not an industry where you invest one year and you get the return next year. It’s a long gestation period industry. So please keep it stable,” Pawah told ThePrint Thursday.
He added that the government should also look at bringing in measures to “fuel the demand for the entire industry”, besides reducing import duties on completely built units or CBUs — as opposed to completely knocked down (CKD) cars which are assembled domestically using imported parts — to push localisation.
“I have always said that India is still a very nascent industry…from an overall volume or a per capita penetration level for four-wheelers especially. And if you look at the technology that is available in India, it is also not the latest. Our ask from the government has always been that if you want faster adoption of new technologies and then localization of it, there needs to be some rationalisation of the (import) duty structure,” he said.
Lesser duties, according to him, would allow carmakers to offer imported cars to consumers at the “right prices” and create demand in the local market. Once demand is created, the cars can be localised — a strategy BMW Group India is following, he added.
At present, Completely Built Unit (CBU) cars attract customs duty of 60-100 percent.
Replying to a query on reports that the government may be mulling giving some concessions to a US-based EV major, Pawah told reporters, “I don’t prescribe any kind of preferential treatment. I think, whatever it should be, there should be a level playing field for all whether it’s a new entrant or an entrant who has been in the market for the last two decades…it has to be the level playing field for all, across technologies. But yes, when it comes to duty structure we are a very high import duty structure country.”
The BMW Group Thursday said it saw record sales of its luxury cars and motorcycles in India in 2023 at 22,940 units, up 19 percent from 2022. This included a total of 14,172 units across BMW and MINI brands, besides 8,768 motorcycles (BMW Motorrad).
Pawha said that in 2023, the premium car industry was estimated to be just about 1.2 percent of the overall passenger vehicle market in India.
“Yes, it’s much better than what it was, maybe three years ago at 0.8 percent…but still 1.2 percent is nothing of a four million car industry. Although the number of wealthy people in India is much more than any other country in the world in terms of sheer population. It’s 50 percent more than China also…the number of millionaires in India is much much more,” he said.
He added, “We are a very value-for-money society, which is absolutely right. We teach that to our children today as well. But I think…with the right product, the right population (younger population coming into the consumption fold) coming through at the same time and the infrastructure…the growth will happen”.
(Edited by Amrtansh Arora)
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