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GST Effect: Hyundai Drops Hybrid Plans In India
Hyundai has dropped its plan to introduce hybrid vehicles in India duet to the high tax rate post-GST.
Under the new GST tax regime, the hybrid vehicles come under the similar tax slab as the petrol and diesel vehicles. Autocar India reports that due to the high tax rates, Hyundai has dropped the hybrid plans in India.
The South Korean automaker had planned to launch the Ioniq hybrid at the 2018 Auto Expo. But now, Hyundai has decided not to introduce hybrid vehicles in the country after the implementation of GST.
Under the GST taxation policy, the hybrid cars will attract a tax rate of 28 percent and 15 percent cess. The total tax levied stands at 43 percent which is higher than the previous tax rate of 30.3 percent.
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Hyundai had also planned to introduce the mild-hybrid technology in the upcoming new Verna, but GST has forced the automaker to drop the plan. Before GST, the mild-hybrid vehicles were benefitted by the FAME scheme. But the government pulled the plugs off the scheme.
Managing Director and CEO, Hyundai Motor India, Y K Koo said, "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 But we have cancelled this project as the government has withdrawn benefits to hybrids after the GST roll-out."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 Creta facelift which is expected to launch in 2018 is likely to feature mild-hybrid technology in both the petrol and diesel variants. But now, with Hyundai ditching the plans, the facelifted SUV will miss out on the mild-hybrid system.
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The high tax rate on hybrid vehicles has impacted several other automakers. Recently, Mahindra also stated that the Scorpio facelift would miss out on the mild-hybrid technology. Japanese automaker Toyota has faced a big blow with the price of the Camry hybrid shooting up post-GST.
Automakers have urged the government to re-evaluate the tax rate on hybrid vehicles. On the other hand, the government is promoting the use of eco-friendly vehicles and aims to go fully electric by 2030. But with such high tax rates, the future of the environmental-friendly vehicles in India looks bleak.
