Porsche, the luxury car manufacturer, from Germany, is apparently exploring the possibility of manufacturing its SUV, Cayenne in India. This move aims to take advantage of the increasing demand for luxury vehicles in the country and also benefit from tax incentives. In 2022 Porsche experienced a 64% growth in sales surpassing Japan in terms of automobile sales. Discussions, with the government, may result in India becoming a part of the Porsches manufacturing network.
Reportedly, Porsche, the renowned German sports luxury car manufacturer, is making preparations to initiate the assembly of its iconic model within India.
This strategic move is in response to an extraordinary surge in demand. Notably, Porsche AG’s executive board members for sales and marketing, Detlev von Platen, and for overseas and emerging markets, Matthias Becker, have journeyed to Delhi to engage with senior government officials.
The focal point of their discussions will be Invest India and Niti Aayog, the esteemed government policy think tank, with a scheduled meeting on August 22nd. The intent of these discussions revolves around exploring the prospect of a local assembly of the SUV (Cayenne), primarily to tap into beneficial tax incentives and amplify the brand’s presence in the rapidly growing Indian market.
A senior executive from Porsche has conveyed, “Porsche is currently evaluating opportunities for on-site assembly of the Cayenne SUV, aiming to harness tax advantages and foster its influence in this swiftly expanding sector.”
Earlier in July, Porsche introduced the 2023 Cayenne facelift in India, with an initial price tag of Rs 1.36 crore, marking a Rs 10 lakh increase over its predecessor. This revitalized Cayenne variant enters a competitive arena, contending against rivals like the Range Rover Sport, Mercedes-Benz GLE, Audi Q8, and Jaguar F-Pace.
Porsche presently offers a spectrum of imported models in India, including the Macan, Cayenne, and Panamera, priced between Rs 88 lakh and Rs 1.8 crore (ex-showroom).
The brand’s sales in India exhibited a striking 64 percent year-on-year surge, reaching 779 units in 2022. Notably, the Cayenne alone accounted for nearly half of this impressive figure. This noteworthy achievement propelled India past Japan in auto sales for the first time, securing the third position.
To provide context on the tax landscape, the Indian government imposes a 100 percent duty on fully imported cars with a CIF (Cost, Insurance, and Freight) value exceeding $40,000, while a 70 percent duty is applied to those valued below this threshold. Comparatively, customs duties on disassembled auto parts that are subsequently assembled within the country are notably lower, falling within the range of 15-35 percent.
Further underlining Porsche’s global expansion strategy, the brand is on the brink of establishing its inaugural assembly facility outside of Europe, located in Malaysia. This facility will be dedicated to the production of the Cayenne, catering to the local Malaysian market.
Should the ongoing negotiations between the Indian government and Porsche materialize as expected, India will join this league of assembly facilities, fostering the brand’s continued growth trajectory.
