High taxation limiting growth of super luxury car market in India: Lamborghini CEO & chairman

Winklemann, however, said the challenge is not one faced by the luxury car industry alone, but is restricting the growth of the entire automobile market in the country. “This is not only a luxury car issue. If we look at the population, compare this with the number of cars sold in India and if you compare this with other countries, it is clear. The car market (here) is smaller compared to population, when it comes into comparison with markets like the United States, China or the European Union. So, this is not only for the luxury business,” he said.

At present, India levies GST rate of 28% on automobiles, with additional cess ranging between 1-22%, depending on the type of vehicle. Fully imported cars attract customs duty of 60-100% based on the size of the engine and cost, insurance and freight (CIF) being less or more than $ 40,000.

Winklemann said there are two issues in the market here which are more obvious than in other countries. “One is taxation, when taxation is very high you have lower volumes. Other effect we have (is) a lot of Indian nationals in foreign residencies, they buy abroad, in Europe or other Asian countries. This is what we experience around the global constantly,” he said.

The Italian car maker, which is set to post its best-ever sales in India in 2022, is otherwise on a growth path. Winklemann said the company is satisfied with the performance in the country. The company is sold out for the year and does not see global uncertainties or any slowdown in the local market affecting sales next year.

Automobili Lamborghini registered a growth of 8% to sell 7,430 units in the first nine months of the calendar year. Lamborghini’s order book globally stands at over 18 months.

“India is a market for us which is on a growth path like most of the markets we have around the world… As we always said, we are not running for certain numbers, and we want to keep the momentum also in the future. We have opportunities in the all the markets in the years to come, with all the new models which will hit the market in the next 2-3 years,” Winklemann said.

Like most of its global peers, Lamborghini too is moving towards cleaner vehicles. While the all new EV, a fourth brand in the portfolio, is likely to be by the end of the decade, Automobili Lamborghini is moving towards cleaner hybrid vehicles in 2023. Automobili Lamborghini will be investing 1.5 billion Euros over the next four years towards this endeavour.

“I see it (electrification) as the biggest change. But I don’t see it as the biggest threat. I think we are well prepared for the things which are coming. The first step is to be all hybridized in the next couple of years. We will start with full electric, starting from the end of this decade”, said Winklemann, adding, “There is a clear task which is coming from the legislature and all our ideas of sustainability for the future generation. So, we have to take this very seriously by changing everything without changing anything (experience of Lamborghini).”