Budget 2011 fine print: imported engines to cost more, even small cars may become expensive

Government is planning to bring car components such as engines and transmissions under SKDs attracting 60% duty, which may shoot the prices of the cars using them up substantially.

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Added in: Features

In reports emerging after experts read the fine print of the Union Budget 2011, seems like the industry is in for a shock. According to a statement in the Union Budget 2011, engines, gearboxes and chassis, which were imported into the country as CKDs or completely knocked down units, attracting a duty of around 10% will now be considered SKDs or semi knocked down units, which attract a hefty duty of more than 60%. From the first reports, it seems that government is planning to bring completely assembled engines and other such components will be excluded from the list of CKDs which attract reduced duties.

Now this is shocking, because if the new duty structure takes effect, not only premium cars, but mainstream cars also will become substantially expensive. Some companies are still importing the engines and transmissions for even their small cars. For e.g. the engine of the Toyota Etios is imported from Japan, and the government levies a 10% duty on it considering it a CKD unit. If the component is shifted into SKD units, the duty will shoot up to more than 60% and the car will lose its price advantage.

The industry is still awaiting s clarification from SIAM and the government. We smell lobbying of the local car industry to protect their interested behind the new duty structure. What do you think, would it be prudent on government’s part to alter the duty structure when the industry is flourishing, to protect the local industry. And will the ploy really protect or destroy the industry in India? Do let us know your opinion.

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  • Maximum says:

    Mahindra Mojo is a different type of a bike looks-wise, u either love it or hate it. With this bike the company is trying to capture the esscense of the 1970's retro look. Is it a good thing or not i don't think so. I wud prefer something more conventional like the sporty design of the Ninja 250R. PS: But with a rider on it, it dos'nt seem that bad to look at.

  • Varun says:

    People who are looking for a relaxed bike like the ZMA, you should probably stick with that… Despite the comparitively lower power, the ZMA would be more relaxed and a better tool for touring and commuting..

    This bike again sports a oversquare bore… 78 mm x 61.2 mm, and i guess that the engine characteristics would be similar to the RTR… would rev much faster fron 0 – 9500 (whatever its limited at)… so i guess this bike would obviously not target the 25 – 50 age group segment and that is seriously why i feel that this bike 'would be just another similar bike' without any change in characteristics… for people who are always 'rev' hungry and looking for 'low-end & mid range', they might be spoilt for choice between the RTR and this one …

  • tushar chhabra says:

    dats only indian name mahindra…

    everything is italian…. 🙁

    very bad indian companies…

  • Vishal Salunkhe says:

    Loved the looks and the specs, cant wait for it to hit the showrooms – wana buy it ASAP !!

  • karan says:

    In my opinion,engine suits well to everyone,even the torque factor is accomplished well…..but wat does it mean purchasing a 300cc byk lukin lyk a normal 150cc byk….

    looks made it a kid in front of the 250cc ninja!!