Tesla’s Elon Musk recently said that the “EV adoption rate globally is under pressure, and a lot of other auto manufacturers are pursuing plug-in hybrids instead.” While he was addressing the Tesla earnings call, has India’s largest passenger vehicle maker-Maruti, already started taking steps to hedge its bets? Well, Maruti reiterated plans to “persue hybrid tech comprehensively over the medium-term.” The higher GST is no doubt a concern but they will wait and watch for what the new Govt does after assuming power.
Hybrid tech consumer friendly for India
Currently Maruti offers the hybrid option in only Grand Vitara and Invicto, its mid-size premium offerings but the car maker is seriously considering expanding the range of offerings and this does not rule out smaller cars as well. Addressing analysts after the earnings, the Maruti management highlighted that the “Hybrids are potent and consumer friendly tech for Indian consumers and want to persue the tech over medium term. Initially the tech favours bigger cars but if volumes kick in with R&D it can be brought to smaller cars too.”
The Maruti senior leadership was quite unequivocal in reiterating that the company is keen to “increase offerings with hybrid option as they are quite positive on hybrids but need to consider sales, volumes and viability.”
High GST on hybrids a concern
The share of hybrids in the Indian automotive industry is barely 2% at the moment but Maruti Suzuki has its eyes trained on expanding the penetration to not just double-digit but also in high twenties over next 4-5 years.
The current GST rate is significantly high at 43% for hybrid cars? Is the Government planning to bring it down to 12% as hinted my Road Transport Minister Nitin Gadkari? Well the Chairman of Maruti Suzuki, RC Bhargava says, now is the time to “wait and watch for the new Govt to come to power and see what they plan on GST. If GST is indeed reduced to the 12% levels that Minister Gadkari mentioned it will be a game changer ..so have to watch out for the developments in the second half of the year.”
