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Mahindra Scorpio Hybrid To Be Phased Out
The high GST on hybrid vehicles has led to discontinuing the Mahindra Scorpio Hybrid variant.
Under the new Goods and Service Tax (GST), hybrid vehicles attract 43 percent tax (28 percent GST + 15 percent cess). There is a substantial increase of 12.7 percent from the previous tax rate of 30.3 percent.
With the GST, the government has moved hybrids into the same tax rate as large vehicles which attract 43 percent. Mahindra & Mahindra offered the Scorpio with its mild hybrid technology 'Intelli-Hybrid', which provided lower fuel consumption by 7 percent, with the 1.99-litre mHawk diesel unit in September 2016.
The company sees the increase in tax for hybrids is not accidental. According to managing director Dr Pawan Goenka, "With review recommendations already submitted to the GST Council and no update having been received yet, it is clear that the decision to substantially tax hybrids was not an accident from the government's end. It was a well-thought-of step. I do not expect the slab to be changed now. It now seems firm and final."
"Hybrids become less attractive and difficult to justify; with no GST concession for hybrids, many players including Mahindra & Mahindra will now do a rethink on hybrids," said Dr Goenka.
M&M will re-visit its product strategy and will take a call whether to pull out such products from the market entirely. "Right now, we have passed only a portion of the impact of the increased tax to customers in the form of revised ex-showroom prices. I don't see hybrids selling if the full impact would have percolated down to the end user," he added.
The company will review the demand patterns for the mild-hybrid and the hybrid version of the Mahindra Scorpio and will take a call. "While we will introduce a non-hybrid version of the Scorpio, the hybrid may get phased out," he said.
However, Mahindra will continue its R&D on hybrid, be it mild or full hybrid as well as 48V hybrid technologies. The company will put on hold all hybrid vehicle till hybrids become a viable option with a tax revision.
DriveSpark Thinks!
While hybrids have been taxed higher, we need to wait and watch if the government is pursuing its goal of electric cars on Indian roads and not hybrids. However, with the current non-available infrastructure for electric vehicles in India, hybrid technology could be a viable option for a cleaner environment.
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