Mumbai: Skoda Auto India has halted plans to import fully-built petrol and diesel vehicles, as well as battery electric cars till it gets clarity on customs duties, a senior executive said.
The Czech carmaker is also deferring plans to locally manufacture electric vehicles, till the Indian government finalises advanced fuel efficiency guidelines under CAFE 3 (Corporate Average Fuel Efficiency), Petr Janeba, brand director at Skoda Auto India told ET.
In addition to the Enyaq-an e-SUV-Skoda was preparing to introduce in India diesel variants of premium models like the Superb, Octavia, Octavia RS, and the new Kodiaq through the CBU (completely built unit) route. Janeba noted that while all these models were ready for launch in the Indian market, the company has since put off those plans till it gets clarity on customs duties.
“We are not sure whether under the current conditions when the customs duty is a question mark, and in all likelihood, it will see a downward revision, whether it makes sense to get a CBU,” said Janeba. “There will be a resolution on customs duty within the next three months. We can then consider an EV introduction from Skoda this year.”
He said Skoda is committed to reintroducing diesel cars in India in its premium portfolio.
The maker of Kylaq and Kushaq models is hoping that a likely reduction in customs duty once India signs a proposed free trade agreement with the European Union will make imports much more feasible. A bilateral trade agreement with the US will also be crucial. India currently levies a customs duty of 110% on fully built cars priced over $40,000, and 70% on those priced up to $40,000.
India and the EU have been in talks for an FTA, with both now looking to finalise it by this year-end. The EU wants India to cut tariffs of more than 100% on cars, wine and whiskey. Meanwhile, India wants greater market access and lower tariffs for key exports, including pharmaceuticals, textiles and apparel.
To be sure, most European automakers in India including luxury car makers Mercedes-Benz and BMW import only 5% of their total vehicle portfolio, instead locally assembling nine out of ten cars they sell in India. Therefore, an FTA with the EU is unlikely to have a major influence on models chosen for the Indian market.
