Thanks to Brexit! Rolls-Royce, Aston Martin have cut prices in India by Rs 20L to more than Rs 1cr

MUMBAI | NEW DELHI: Thanks to Brexit, supercars made in the UK have just become lighter on the pocket. Rolls-Royce, Bentley, Aston Martin, Range Rover and Ferrari have cut prices in India by Rs 20 lakh to more than Rs 1 crore, passing on the benefits from the pound sterling’s dive post Britain’s decision last year to exit the European Union.

The pound has dropped about 20% against the rupee in less than a year, making exports to India cheaper for UK-based manufactures and companies that bill India sales in the British currency, such as Italy’s Ferrari. They cut prices by 5% to 15%, hoping to attract more buyers for their marquees in a country that is home to the third most number of billionaires.

Sales of cars costing Rs 2 crore and more in India topped 200 units in 2016, a record, and about half of those were British-made. People who deal with supercars expect imports from the UK to climb, threatening Italian and German manufacturers who bill India sales in dollars or euros — these currencies, too, have dropped against the rupee, but not as much as the pound.

“Pricing is at its best over the past three to four years,” said Lalit Choudhary, director at Performance Cars, the official importer of Aston Martin cars in India. Implementation of the goods and services tax (GST), which is expected to make the tax regime stable, could offer a more conducive environment for volumes to grow further, he said. Barring Aston Martin, which has been reducing prices over the past six to nine months, the others have passed on the benefits just recently.

Rolls-Royce and Ferrari lowered prices in March, whereas Range Rover announced its new prices with effect from April 1.

SIGNIFICANT INCREASE IN ENQUIRIES RECENTLY
Sharad Kachalia, director at Navnit Motors that imports Rolls-Royce and Ferrari cars in India, has seen a significant increase in enquiries in recent weeks and he expects several of those to result in actual buying. “The market situation is very positive.

All uncertainties have gone away, with a relatively stable government (in India) and benefits of currency depreciation being passed on,” he said. “We are looking at a much stronger year for the overall supercar market, especially for completely built imports.” He cited currency hedging contracts that companies like Rolls-Royce had previously entered into for them to delay the price revisions, though the pound has been depreciating over the past year.

One of the major roadblocks in India for supercars has been its steep import duty, which has also been tinkered with often. Over the past five years, the tax on cars costing more than Rs 2 crore has gone up by over 70%, which market players blamed for sales falling to as low as about 100 units in 2014. Market players now expect the rollout of GST to make tax policies more stable. Satya Bagla, managing director of Exclusive Motors, the sole importer for the Bentley brand in India, said he had record sales in 2016 and added he expects to exceed that this year.

Car exports from the UK to India have grown almost 11-fold in the past seven years, according to UK industry body Society of Motor Manufacturers and Traders (SMMT). Indian motorists bought 3,372 British-built cars in 2016, up from just 309 in 2009. Demand increased 15.8% compared with 2015, lifting India from the tenth to eighth place in the UK’s Asia export markets. Tamzen Isacsson, SMMT’s director of communications, said despite high import duties, the market for UK-made cars is growing.

“As a car market, India really understands British brands. India and the UK have a great history of collaboration in the automotive sector and it is essential we secure mutually beneficial trade relationships in the future,” Isacsson said. One of the key drivers for the market for super-luxury cars in India has been the increasing number of ultra-rich in the country.

According to the Knight Frank Wealth Report, India ranked sixth in terms of the growth rate of Ultra High Networth Individuals in 2016. With the current pace, the country is expected to move up to the third spot over the next decade. India is home to 2% of the world’s millionaires (13.6 million) and 5% of billionaires (2,024).


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