The South Korean carmaker Hyundai seems to have decided to shelve plans to introduce hybrid models in India due to the lack of support from the government. The decision is taken in the aftermath of the higher tax rate on the hybrid cars under the new landmark legislation, GST (Goods and Services Tax).
Y K Koo, managing director and CEO, Hyundai Motor India has told Autocar India the company, which had originally planned to bring the hybrid model Ioniq at the Auto Expo 2018 and other mild hybrid models to India, has dropped the plans as the benefits to hybrid models have been withdrawn.
Under the GST, the hybrid vehicles have been taxed at the highest rate of 28 percent with an additional 15 percent cess, taking the total to 43 percent. This makes the hybrid models as expensive as any other luxury diesel or petrol models, which also attract 28 percent, rate with a cess of 15 per cent. The tax on hybrid models before GST was 30.3 percent. Although the government was expected to review the GST on hybrid cars, it seems to be not keen on the issue.
"We had a plan to introduce mild hybrid technology for the next-generation Verna. But we have cancelled this project as the government has withdrawn benefits to hybrids after the GST roll-out. The benefits towards mild hybrid and strong hybrid vehicles are continuously decreasing," Koo told the publication.
While Hyundai is not the first one to shelve its plans post GST in India, we are sure it will also not be the last. It was reported earlier that UV maker Mahindra and Mahindra is planning to pull the plug on its Scorpio hybrid due to the higher tax rate. Carmakers like Maruti Suzuki and Toyota, however, continue to be in the market with the hybrid and mild-hybrid models. Post GST, these carmakers have hiked the prices of hybrid models in India. It remains to seen whether the government will review the GST rates on hybrid cars.
Source: ACI
