GST Impact: Mahindra and Toyota to Stop Hybrid Car Launches

2015 Toyota Camry Hybrid Test Ride Review

GST imposes a high rate of 43% tax incidence on the hybrid cars making them significantly pricier than pre-GST era

As GST Council has slapped 43% tax rate on the hybrid cars, the impact is clearly showing. Toyota and Mahindra, two automobile giants that sell hybrid models in India have planned to stop launching the environment friendly and fuel saving cars here, as the high pricing is about to affect the sales of these models.

As we have already reported, Mahindra has decided not to offer the mild-hybrid version of upcoming Scorpio facelift that is expected to launch later this year. Apart from that, the brand has also decided to not launch any new hybrid models in the domestic market. The company is ready to launch full hybrid or mild-hybrid cars, but till the tax amount is lowered it won’t roll out these eco-friendly models here. However, it will continue selling the hybrid cars in overseas markets.

2017 Toyota Prius Prime India Launch 12

Also read: 2017 Toyota Prius Launched in India at Rs. 38.96 Lakh

After GST rolled out, hybrid cars have become significantly expensive in the country. Toyota increased pricing of its Camry hybrid by up to Rs. 5 lakh, while the mild-hybrid variants of the Mahindra Scorpio have become pricier by up to Rs. 1 lakh. Maruti Suzuki Ciaz SHVS and Ertiga SHVS also become dearer by up to Rs. 1 lakh.

Toyota has a strong position in the hybrid car segment of Indian auto market with models like Camry hybrid and Prius hybrid. The former one has contributed significantly in the growth of hybrid cars here. No wonder, with Toyota and Mahindra scrapping their hybrid car plan in the domestic market, India’s green car drive is going to be affected.


Also read: Upcoming Cars in India Between Rs. 5-8 Lakh

Interestingly, the hybrid cars are positioned in the same tax slab as the luxury cars. After GST council revealed the tax slab for hybrid vehicles, several automakers that sell these cars have appealed the government to reconsider the high rate of tax. But, the council has made it clear that its decision is firm and final.

Toyota Prius Gallery