Skoda Auto today announced that it will be increasing car prices in India across its model range from March 1, 2018. The Czech automaker says that the company had to hike car prices due to the revision in customs duty announced in the recent Union Budget announcement. The company says that the price of its cars will go up by 3 to 4 per cent depending on the model and variant but, in order to soften the impact of the price hike the company says that it will increase car price in a phased manner. So, as of March 1, 2018, prices of the all Skoda car sold in India will go up by 1 per cent, which translated to a hike of 10,000 to ₹ 35,000 depending on the model and variant.
With the recent union budget, Finance Minister Arun Jaitley proposed raising the customs duty on vehicles that are not fully made in India but built using kits manufactured outside the country and are finally assembled in India. The customs duty for these vehicles has been raised from 10 percent to 15 per cent. Considering none of the Skoda cars are 100 per cent localised products, especially, the Skoda Kodiaq SUV, which is a CKD (completely knocked down) unit, the increased customs duty will impact the manufacturer, and thus its customers as well.
Last time Skoda increased car prices in India was on January 1, 2018, by, attributing the price hike to changing market conditions and various external economic factors. Back then the prices of Skoda cars went up by 2-3 per cent across the company's model range.
In addition to the price hike announcement, the carmaker has also announced the introduction of a new loyalty bonus of up to ₹ 50,000 for existing Skoda owners who might be planning to purchase another Skoda car. This could be one of Skoda's strategies to promote customers to make a purchase before the actual hiked prices kick in, which we expect would happen by the end of this fiscal year.