Recently, I was invited to a podcast on the luxury car market in India, and as I was taking some data points, it struck me that the market size needs to be bigger and match the India shining story. For reference, around 7.5 lakhs Mercedes were sold in China alone last year, and in India, that number was only roughly around 16,000. The whole luxury car industry put together in 2023 is expected to crawl to 47,000 cars mark. It’s a shame when you compare yourself with China or North America. Heavy taxation, lower India allocation or a mindset to buy a German badge, and tax authorities will run to raid you and scrutinize your books. It may be the sum of all these factors, but what will motivate our startups & entrepreneurs - seeing a Lamborghini on the roads and wanting to own it or being comfortable in hailing an Uber ride every day?
Bugatti La Voiture Noire, someone anonymously bought it for $18.7 million, roughly Rs 150 crore before all the taxes, should be painted and celebrated in corporate offices or may be made into a giant statue rather than those confusing modern arts or any politicians getting themselves stoned for personal glory. A Bugatti will inspire CEOs & entrepreneurs to toil hard to be their best version. Another observation I have had is that most startup entrepreneurs do not like flaunting or talking about their supercars on social media, thinking it will catch the attention of envious eyes. They don’t realize that they might inspire a generation - if they can do it, so can you.
We have 28% GST, 70%-100% import duty and CESS, which is on luxury, and the supercar goes up to around 20%, which means around 150% top-up on supercars before they can be driven on Indian roads. Not to mention road taxes, which vary from state to state. In Karnataka, If you own a Urus, you will have to pay 65 lakhs. Let’s not even get started on the appalling city roads and traffic. Lamborghinis, Bentleys, and Ferraris put together might not have sold more than 1000 cars. What will this little drop in revenue add to the government treasury? For example, why should the populist scheme always tax the richest? Why? When Dubai can have Lamborghinis with their cops as chasing vehicles, why can’t we have at least one each with the police in every major city? Imagine the tourism and India shining image boost we will get globally, and this would not even cost 3-4 crores without any taxes. Much less than the cost of a statue.
