No Hyundai Creta, Verna mild-hybrid versions for India, here is why

The future looks grim for hybrid cars in India as more car makers are announcing their plans to drop hybrid models, thanks to the Goods and Services Tax (GST). The newly implemented tax legislation has placed higher tax rate of 28 percent on hybrid cars in India, taking the total tax rate to 40.3 percent from the previous 30.3 percent.

The unfavourable GST rate has prompted the South Korean carmaker Hyundai to drop its plans for hybrid cars in India. This essentially means that Hyundai will also not bring the mild-hybrid models of the Verna and its Creta SUV to India.

Hyundai had plans to bring the new Verna to India in mild-hybrid version and now with the announcement, August 22 will only see the petrol and diesel engine options. The 2017 Verna will get the same engine of the current model. It is powered by 1.4-litre and 1.6-litre engines in both diesel and petrol variants.

Y K Koo, MD, CEO Hyundai Motors said, "We had planned to introduce mild hybrid version for the next generation Verna because at that time the government has some benefits for such a product. But we withdrew our plans to introduce the mild hybrid technology with the next-generation Verna as the government has withdrawn the benefits for such models."

Hyundai was also expected to introduce the Creta with mild-hybrid technology in India. The new Creta with cosmetic upgrades was expected by the end of this year. Now these plans stand cancelled. However, Hyundai has expressed its willingness to take the game in the Indian market forward with electric cars. In the GST regime, electric cars get the lowest duty (in automobiles category) of 12 percent. Hyundai is expected to up the ante in the electric car market with electrically powered version of the Grand i10 and i20 hatchbacks and others.