June 28: Some automobile dealerships in town are reaping a pre-Puja windfall in what is usually the lean season as buyers respond to "pre-GST discounts" rolled out by manufacturers to clear stock.
Hyundai is offering price reductions between Rs 15,000 and Rs 1.6 lakh across its models. Mercedes has registered its highest ever monthly sales in Calcutta by offering a 6.1 per cent pre-GST discount on prevailing prices. Honda has come out with "GST price protection" for potential customers
Market leader Maruti is the one bucking the trend by not offering any special discounts. Toyota too has not seen any rise in sales because of GST looming over the market.
Since Bengal's VAT rate of 14.5 per cent is higher compared to Delhi's 12.5 per cent, the GST rollout is expected to trigger a reduction in car prices in the state even though four-wheelers will be in the highest tax bracket of 28 per cent from July 1. "Excise duty of 32 per cent, 2 per cent central sales tax and 14.5 per cent VAT raise the tax component of luxury car prices to between 48 and 49 per cent. With GST pegged at 28 per cent and sales tax at 15 per cent for luxury vehicles, the tax component could drop several notches for mid-size and luxury vehicles," said a source in the automobile industry.
The small car market could witness a reduction in prices by around two per cent and more.
Maruti has adopted a wait-and-watch approach. "We had no stock to clear as such because of the bi-annual plant shutdown in June. Our discounts are the normal ones on certain models and our sales have remained the same," said a spokesperson for the company.
But Hyundai has reason to be revved up about the market. "We have recorded a 20 per cent increase in sales this month," said a source in a Hyundai showroom.
The company is offering discounts of Rs 15,000 on the Eon and i10. The i20 is selling at a discount of Rs 25,000 and the Verna at Rs 30,000 less than the showroom price. The popular Creta wears a Rs 60,000 discount tag and the price of the Tucson has dropped by Rs 1.6 lakh.
The dealership has already sold all Cretas and Vernas that were in stock, a source said.
At the other end of the wheel spectrum, Mercedes has sold 60 vehicles in June. A spokesperson for Interkrafts Benchmark, the city's sole Merc dealership, said the figure was the "highest ever in a month". Interkrafts normally sells 40 vehicles a month on an average. The company, expecting a "drastic price correction after GST", has been offering a 6.1 per cent discount since mid-June.
"The highest sellers have been the C-Class and the GLA-Class," the spokesperson said.
Audi and Porsche are also offering 6.1 per cent discounts. "Sales have gone up by 20 per cent," said Sandeep Bajaj, who runs the Audi and Porsche dealerships.
Toyota appears to be the only brand that has not benefited from offering discounts. "We are offering a pre-GST discount of Rs 20,000 to Rs 50,000 on various models but have not seen any sales uptake this month," said Ashok Manektala of Topsel Toyota.
Its Japanese rival Honda has assured customers of GST price protection. "What this means is that those customers booking cars in June will be eligible for price protection in case the prices of our cars come down post-GST. The company will refund the extra amount," said an official of Pinnacle Honda.
