FTA with EU: Pros and Cons
The Indian luxury car buyer is under the impression that the price of European luxury cars such as Audi, BMW, and Mercedes-Benz will come down drastically following the Free Trade Agreement (FTA) signed recently by the Union government and the European Union. The FTA will not affect the
pricing of the cars by Audi, BMW, and Mercedes-Benz because they are being assembled in India, but it will bring down the prices of the completely built-up unit (CBU) car models from brands such as Porsche, Lamborghini, and Ferrari.
With zero import duty on American goods coming into India, we might see cars made in the United States coming in via the CBU route. This will help manufacturers like Ford, GM, Tesla, and Stellantis to bring some of their cars to our market. There is a good probability that we might see cars like the Ford Mustang, Hummer, and some high-end American cars that offer a right-hand-drive option. Furthermore, the trade deals will help component manufacturers and car manufacturers to export cars to Europe and the US.
The way global manufacturers are rolling back their plans to go only electric in the future looks quite bleak, with more and more manufacturers bringing back cars with V8 engines. Audi, which was banking heavily on electric vehicles (EV), has brought back a V6 diesel engine that meets Euro 7 norms. Everyone talks about how cheap it is to run an electric car and the distance it can cover, but nobody tells you how much you will get for your EV after six to seven years, the extra cost you are required to pay up front, and how long before you can recover the extra amount you have paid for the EV by saving on fuel cost, if ever. The fact remains that the resale value of a petrol car will always be better than that of an EV.
EDITOR – ASPI BHATHENA
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