Hyundai Backs GST Reforms to Drive India Auto Sector Growth

In a significant boost for the automobile sector, Hyundai Motors India has hailed the recent GST improvements as a "landmark step" to energise industry growth and stimulate demand mainly in rural and emerging markets.

At the SIAM annual convention, Unsoo Kim, Managing Director of Hyundai India, also noted that the GST changes were timely as it supported the Make in India vision and would lead to a transition from value engineering to value mobility.

As per the new tax structure, the GST rates on small cars have fallen from 28% to 18%. For larger cars (those with an engine above certain defined petrol or diesel capacity), the rate is now at 40% but without the old cess on top of that. Hyundai will ensure that every rupee of benefit will be passed on to customers.  As of 22 September, many cars and SUVS will be available, at substantially lower prices, with some vehicle prices dropping by as much as Rs 2.4 lakh.

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"The GST overhaul will further energise the automotive sector, aligning seamlessly with the Make in India vision, by encouraging domestic manufacturing and stimulating demand across both urban and rural markets," Kim said.

Kim also stressed the importance of localisation, highlighting that Hyundai is operating at lower than 92% localisation with its production base.  Hyundai recently started building battery packs at its Chennai facility. He described this reform in goods and services tax as superiority over tax reimbursement—it is a platform for inclusive growth, enhanced local production, and a more energy efficient, technology-enabled future for mobility in India.

For the sector generally, this overhaul is injecting new energy. Lower taxes should result in greater market penetration among first time buyers, increase demand during the festival season, and improve the competitiveness of the entire automobile and ancillary ecosystem.