Festive cheer for luxury car buyers as Mercedes, BMW, JLR, Audi, Volvo models get cheaper by up to Rs 30 lakh

The festive season has brought added cheer for the luxury car buyers in India as vehicles of all the top brands, such as Mercedes-Benz India, BMW Group India, Jaguar Land Rover (JLR) India, Audi India and Volvo Car India, have become relatively cheaper due to the Goods and Services Tax (GST) rate rationalisation.

The luxury cars are now based in the 40% GST slab. Earlier, they attracted a GST of 28% in addition to a compensation cess in the range of 20% to 22%, resulting in the total tax burden of 48% to 50%. While lower taxation has led to lower prices, the carmakers have announced that they will pass on the benefits to the customers.

On electric vehicles (EVs), the GST rate is the same as before at 5% with no compensation cess, which has been removed for all kinds of vehicles in the GST 2.0 regime.

According to the official details shared by Mercedes-Benz, BMW, JLR, Audi and Volvo, their cars will witness a price drop of up to Rs 30.40 lakh. For reference, this price drop will be on the ex-showroom price of any car.

Amit Garg, Director, Shiva Group, which operates JLR dealerships across the Delhi-NCR region, told Moneycontrol that GST restructuring will boost demand for luxury cars in India. "With lower prices, more customers will opt for luxury cars, and those who already own such models will think about upgrading to a higher segment. This will help in the overall growth of the luxury car market in our country," he added.

S&P Global Mobility Light Vehicle Production Forecasting Associate Director Gaurav Vangaal told Moneycontrol that the GST rationalisation is anticipated to reshape India's luxury car market. "With effective tax rates lowered, premium brands are responding swiftly with revised pricing strategies. This is not just a festive season boost; it is a strategic unlock for aspirational buyers at the entry-luxury threshold. We are likely to see an increased interest in first-time luxury ownership and may experience a broader shift in consumer sentiment," he observed.

Mercedes-Benz India

Mercedes-Benz recently announced that the revised GST on all its internal combustion engine (ICE) cars will be 40% with effect from September 22. This will result in a price drop of up to Rs 11 lakh on its cars.

Among Mercedes-Benz luxury SUVs, the GLA 220d 4MATIC AMG Line will be cheaper by Rs 3.8 lakh, the GLC 300 4MATIC by Rs 5.3 lakh, the GLE 450 4MATIC by Rs 8 lakh, and the GLS 450d AMG Line by up to Rs 10 lakh.

For sedans, the A200d will see a reduction of Rs 2.6 lakh, the C300 AMG Line by Rs 3.7 lakh, the E-Class LWB 450 4MATIC by Rs 6 lakh, and the S 450 4MATIC by up to Rs 11 lakh.

BMW Group India

Among BMW luxury SUVs, the X1 will be cheaper by Rs 1.8 lakh, the X5 by Rs 6.3 lakh, and the X7 by up to Rs 9 lakh. For sedans, the 2 Series Gran Coupe will see a reduction of Rs 1.6 lakh, the 3 Series LWB by Rs 3.4 lakh, and the 5 Series LWB by up to Rs 4.1 lakh.
The MINI Cooper line-up will witness a price cut in the range of Rs 2.5 lakh to Rs 3 lakh.

Jaguar Land Rover India

JLR India has already passed on the GST rate restructuring benefits, in the range of Rs 4.50 lakh to Rs 30.40 lakh, to its customers.

The Discovery SUV has witnessed a price cut from Rs 4.5 lakh to Rs 9.9 lakh, the popular Defender SUV from Rs 7 lakh to Rs 18.6 lakh, and the Range Rover SUV line-up from Rs 4.6 lakh to Rs 30.4 lakh.

Audi India

In Audi's luxury SUV line-up, the price drop will be up to Rs 3.07 lakh on the Q3, Rs 4.55 lakh on the Q5, Rs 6.15 lakh on the Q7 and Rs 7.83 lakh on the Q8.

If we talk about the company's luxury sedans, the A4 will see a price cut of up to Rs 2.64 lakh and the A6 of Rs 3.64 lakh.

Volvo Car India

Volvo currently offers only two ICE models in India, the XC60 and the XC90, both being SUVs.

From September 22, the XC60 will be cheaper by up to Rs 4.79 lakh, while the XC90 will witness a price reduction of up to Rs 6.93 lakh.

Luxury car market in India

In FY25, the luxury car sales in India crossed 50,000 units in a fiscal for the first time, reaching around 51,500 units. Mercedes-Benz led the segment with 18,928 units, followed by BMW with 15,266 units and JLR with 6,183 units.