Additional tax on diesel vehicle will not help industry: BMW

Stating that the auto industry is working in a very "fragile economic environment" in India, German luxury car maker BWM today said any move to levy more taxes on diesel vehicles will be counter productive.

The company that had witnessed a sales growth of around 45 per cent in 2011 in India with a total of 9,371 units said it expects growth to moderate to up to 20 per cent.

"We are working in a fragile economic environment now. This is the most difficult year that we are seeing in the last two years. The increases in excise duty, import duty and petrol prices have not helped in improving consumer sentiments at all," BWM Group India President Andreas Schaaf told reporters here.

Asked about the government planning to put additional taxes on diesel vehicles, he said: "Anything that puts additional burden on the customers does not help the environment."Citing company's sales growth as example, he said, "In the first half of the last year, we grew by 90 per cent, which of course is astronomically high and cannot be sustained, but this year our sales growth is just 10 per cent."

Till May this year the company has sold 3,707 units.

The Finance Ministry is examining a proposal to hike excise duty on diesel cars, a move which may discourage consumption of subsidised fuel by personal vehicle owners.

"The proposal is there and that is being examined by Finance Minister (Pranab Mukherjee). Consultations are being held and appropriate decision will be taken by the government in due course," Central Board of Excise and Customs (CBEC) Chairman S K Goel had said earlier this week.

The BMW group that had launched the iconic brand Mini, today announced the launch of Mini Financial Services, a separate financing arm under BMW Financial Services.

Schaaf said so far 50 units of the Mini have been sold in India since the official opening of the first dealership in Mumbai in April.

"The Mini is sold out for the for the next three months. The number of orders are between 100 to 200 units," he added without divulging the exact details.

The luxury small car is available at prices ranging between Rs 25.5 lakh and Rs 35.9 lakh (ex-showroom Delhi) for its three variants.