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Informist, Thursday, Sept. 11, 2025

 

NEW DELHI – Reduced goods and services tax on automobiles, effective from Sept. 22, is likely to provide the biggest fillip to compact sport utility vehicle segment, especially those models costing under INR 1 million, Whole-time Director and Chief Operating Office at Hyundai Motor India Ltd. Tarun Garg said Thursday on the sidelines of the 65th annual convention of the Society of Indian Automobile Manufacturers. He emphasised that majority sales are still in the INR 600,000 – INR 1 million bracket.

 

"The maximum cut has happened at 11-13%... Of course, theoretically speaking even 50% has become 40%. But those 50% were very very few cars," he said, while adding that the cut is highest in the small car segment where the volumes are high. "And in terms of price also if you see, the (compact) SUV is in the less than 10 lakh rupees, the customer benefit is the most. Number two if you see, most of the manufacturers are launching products there only...So growth will also come where the new products will come," Garg said.

 

He also said that due to GST cuts, higher-end variants of several models have now come under the INR 1 million bracket and in some states the registration tax changes at that mark, effectively making such cars more affordable for end consumers.  

 

As part of the latest reforms to further simplify the GST structure, indirect tax on small cars will be slashed to 18% starting Sept. 22 from 28% presently.

 

CAPACITY ADDITION

 

On the company's Talegaon plant in Maharashtra, Garg said the facility will come on stream in the third quarter of the ongoing fiscal. It is expected to augment the company's annual production capacity by 170,000 units. The current annual production capacity of Hyundai Motor's Chennai plant stands at 824,000 units. In 2028, the Pune plant is expected to add capacity of another 80,000 units to help the company cross the 1 million mark on a cumulative basis, he said. On capacity utilisation, Garg said "...For years and years Hyundai has operated at more than 90% capacity utilisation. In fact, this is one very big reason for us to have very healthy EBITDA (earnings before interest, tax, depreciation, and amortisation) margins."

 

On battery-as-a-service, Garg said, "Battery-as-a-service, look, we did our research. As of now, not too many customers are opting for battery-as-a-service. So it's not a big deal. It is just about formulating a scheme for the customers. But actual adaptability of the acceptability of the battery-as-a-service is very less as per our market information. So as and when if it is required, we will definitely explore it."

 

Battery-as-a-service is an ownership model wherein customers lease the battery for their electric vehicle instead of buying it, reducing the upfront cost and making electric vehicles more affordable.

 

Thursday, shares of Hyundai Motor India closed at INR 2,507.80 on the National Stock Exchange, up 0.3% from the previous close.  End

 

Reported by Shakshi Jain

Edited by Deepshikha Bhardwaj

 

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