Merc, BMW slash prices to boost sales before GST rollout

In a bid to boost sales, German luxury car market leader Mercedes-Benz and its compatriot and archrival BMW have cut down prices of their models, even before the scheduled rollout of the goods and services tax (GST) on July 1.
Prices will be slashed down in the range of Rs 1.25 lakh to a whopping Rs 7 lakh for all models assembled locally in the country. The price cut is with immediate effect.
The Pune-headquartered Mercedes-Benz India, the biggest luxury carmaker by sales in the country, announced on Thursday a downward revision in its transaction prices to cover the difference between current ex-showroom prices and post GST ex-showroom prices. This is applicable to its entire range of cars under the Made in India product portfolio.
The price revision on a weighted average of 4 per cent will be effective immediately, and is aimed at providing value to a customer’s purchase decision before GST implementation.
Mercedes-Benz cars that will become cheaper include models like CLA, GLA, C-Class, E-Class, S-Class, GLC, GLE, GLS and Mercedes-Maybach S 500, which are part of the company’s Made in India models.These cars cost between Rs 32 lakh and Rs. 1.87 crore at Delhi showroom. “We are now passing on the benefits of post-GST pricing of our Made in India cars with immediate effect,” said Roland Folger, managing director and CEO at Mercedes-Benz India. “To ensure complete peace of mind for our customers, we have decided to pass on the GST tax benefits at an earlier stage at our cost. This approach will benefit the customers who want to purchase a locally produced Mercedes-Benz from now on and during the month of June,” Folger added.
The price reduction of the entire Made in India portfolio ranges from 2-9 per cent, depending on the tax structure and local body taxes of each state. The weighted average of this is a price reduction of 4 per cent on transaction prices of customers, the company said. “The impact on the prices of imported or CBU vehicles is yet to be evaluated,” Folger said.
He further said the implementation of the GST structure is a landmark achievement for the Indian economy, which would support the ease of doing business in the country. “We are also confident that post GST implementation, there will be growth momentum in the luxury car industry,” Folger said. Audi, the second biggest German luxury carmaker, is also believed to be offering GST benefits now with exclusive offers on select Audi models. These models are Audi A3 at Rs 30.50 lakh, A4 at Rs 38.10 lakh, A6 at Rs 48.10 lakh, Q3 at Rs 32.20 lakh and Q7 at Rs 72.90 lakh at Delhi showroom.
Taking a cue from Mercedes-Benz India, German giant BMW, the third biggest luxury carmaker by sales in the country, too announced an immediate reduction in its prices. The company, however, refrained from detailing the actual reduction in prices.
“BMW Group India welcomes the implementation of GST in India. BMW is the fastest to offer preponed GST benefits to its customers, much before the roll-out of GST itself,” said Vikram Pawah, president, BMW Group India.
In addition to GST benefits, BMW has also reduced rate of interest to 7.90 per cent, offering complimentary three years’ service and maintenance, complimentary one-year insurance and assured buyback up to four years to entice buyers. The base rate for automobiles has been set at 28 per cent under the GST, which is on par with the current rates for small cars and lesser than the rates slapped on bigger vehicles. An additional 15 per cent cess is levied on large cars, including luxury cars.