The recent news from Rediff Business states that, Mitsubishi is planning to launch the Lancer Evolution, the much awaited model in 2010. It is supposed to be 2.0 litre, turbocharged engine producing 300 bhp. But, this is again going to be a CBU. The car is expected to cost around 40 Lakhs. The company has indicated a target of 75 cars in its first year.
So, rather than competing against the likes of Accord, Teana and Superb, the EVO will struggle between Audi, Merc and BMW. The sole player for now in the price range of 40 lakhs is Volvo with S80.
The Lancer Evo might join the fleet of CBUs after the recent and potential Fiat 500 and Volkswagen Beetle. Every second girl who sees the Beetle is actually impressed till she knows the price. Though these cars are much preferred and suitable for our urban markets, may be the demand is meagre to actually set up a plant here.
But this situation could actually be a paradox.
Unless the demand is high, there will be no local production. Unless there is no local production, CBUs will attract 110% tax thus increasing the price and reducing the demand. So, how should companies strike a balance?
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