Rolls-Royce Cullinan To Get Rs 4 Crore Price Drop: We Explain
India currently has one of the fastest-growing ultra-high-net-worth individual (UHNI) crowds in the world. UHNI refers individuals with net worths of USD 30 million (Rs 250 crores) or above. The ultra-luxury car market has also posted immense growth in the past few years. The Rolls-Royce Cullinan, despite its steep price, is a top pick among UHNIs. The deal is about to get sweeter as the Rolls-Royce SUV is expected to get a massive price drop soon. Up to 4 Crores could be shaved off its present price in the next few years!
The regular Cullinan has an ex-showroom price of Rs 10.5 Crores in India. The Black Badge stands higher at 12.5 Cr, ex-showroom. This super-high pricing was due to the high import duties imposed by the Indian government on these. The duty slab previously stood at 110 percent.
Now, India and the United Kingdom (UK) have finally signed a Free Trade Agreement (FTA). This trade deal has lowered the slab significantly. It has come down to just 10%. Unlike what you'd expect, this reduction and its effect on vehicle prices will not happen overnight.
The Cullinan houses a massive 6.75-litre V12 petrol engine under its hood. It is capable of producing 563 bhp and 850 Nm of torque. The FTA has kept its benefits limited to Internal Combustion Engine (ICE) vehicles alone.
It says that the import duty on petrol cars with engine capacities exceeding 3000cc will be 'progressively reduced' to 10% over the next five years. The Cullinan clearly qualifies for this, and five years down the line, could come with a very attractive ex-showroom price. The best speculations suggest that the price could stand in the ballpark of 6.5 Crores! Let's get into the specifics of this...
The Cullinan costs £339,175 (approximately 3.95 Crores, considering £1= Rs 116.30) in the UK. This, however, includes taxes. Britain imposes 20% VAT on cars of this segment. Take that off, and the price drops to 3.88 Crores. With the revised slab in place, the import duty will stand at just 38.5 lakh rupees. The total cost amounts to 4.23 Cr.
Now factor in the likes of countervailing duty (30% or 1.16 Cr), GST (18% or 69.30 lakh) etc, and the landing price would become 6.08 Crores. The actual ex-showroom price could be slightly higher, including the 10 percent dealer margin and 3% insurance. It could be around 6.5 Crores- clearly 4 crores less than the present price. If this is the case, the Cullian will finally have a fair price in the Indian market.
More Vehicles to Benefit From The FTA
As you might have guessed by now, the actual scope of this trade deal will not be limited to a single make or model alone. It clearly specifies the qualifying criteria and details of the segment-wise tax-cut...
The FTA has explicitly exempted hybrids and battery electric vehicles from benefiting from the revised slabs. So let's keep the scope of this article to petrol and diesel cars alone. Aston Martin DB12, Vanquish, Vantage, Bentley Bentayga, McLaren 750S, GT, Rolls Royce Phantom, Ghost, Cullinan, Range Rover Sport SV and the Range Rover SV will have their import duties lowered to 10 percent over the next five years.
Will the FTA make the Land Rover Defender more affordable? Not really! Land Rover currently makes the Defender in its Nitra plant in Slovakia. It is then exported to various other countries, including the UK. Clearly, it doesn't fall into the scope of this FTA.
The Lotus Emira, Mclaren Artura, and Mini Cooper S will be taxed at 10% after five years of the FTA (previously these used to attract 66% import duty). In the first year, the duty will be 50%, which is expected to decrease progressively. The Cooper S price could gradually fall to levels that will pump much more value into the product.