Almost every passenger vehicle OEM in India has announced a price hike of its vehicles between three and five percent starting January 2025. Even some commercial vehicle manufacturers have announced that they will hike the prices of their vehicles starting January 2025 owing to the increase in input costs, rise in operational expenses and inflation. 
While the annual inflation rate in India eased to 5.48 percent in November of 2024 from 6.21 percent in the previous month loosely in line with market expectations of 5.5 percent, according to a report by tradingeconomics.com, the increase in automobile prices by three to five percent is expected to dampen the market sentiment at least for the short term. 
If the spike in auto sales during the festive season provided a reason to cheer, the first half of the current fiscal saw many segments registering a slowdown in sales. The extent of this was also indicated by the automotive dealers’ body, the Federation Of Automotive Dealers Association rising in favour of its dealer members to urge automakers to adjust their production schedule in the wake of the inventory at dealers reaching an alarming level. 
The festive season helped to lower the inventory build up of vehicles to a certain extent. However, with the last quarter of this fiscal expected to be a sluggish period for auto sales as it traditionally is considered to be, the news of hike in GST on old and used vehicles from 12 percent to 18 percent is likely to cause some shake up in the used vehicle market that has seen better times in the recent few months as more and more aspiring motorists turn to used cars because of budget constraints and other factors. 
Despite the higher interest rate of above 13.5 percent in case of used vehicles as compared to the interest rate of between eight to 10 percent for new vehicles, the pull for them has been high in the recent times. This is likely to be affected if and when the GST Council’s fitment committee clears the proposal to change the GST on old and new vehicles with an engine capacity of no bigger than 1,200 cc and length of no more than four metre as mentioned above. Even electric vehicles that attract a GST of five percent when bought new will see the GST on them hiked to 18 percent from 12 percent if the proposal goes through. 
While the logic that the hike in GST on used and old vehicles will increase the sale of new small vehicles is hard to understand when applied against the fact that an entry-level vehicle like the Maruti Alto K10 today looks cost to buy at a price of INR 470,000 on-road Mumbai for the basic trim. Also, the sales of it have been steadily shrinking with a trend visible of a rising demand for SUVs. 
Even an entry-level SUV with Maruti S-Presso costs INR 499,000 on-road in Mumbai for the basic trim. The ones like Hyundai Exter or Renault Kiger costs INR 721,000 and INR 705,000 on-road in Mumbai for basic trim variant. 
With prices of vehicles in India claimed to have gone ‘over the roof’, not counting the hike in January 2025, a proposal to hike the GST on luxury automobiles to 35 percent is said to be under consideration. 
Against such a background it would be worth understanding the taxt structure on automobiles in the country to anticipate what an increase from 28 percent GST to 35 percent GST would entail. Passenger Vehicles (Petrol, CNG, LPG) measuring no longer than four metre in length and having an engine of no more than 1,200 cc are taxed at 28 percent. With a compensation cess of one percent, the total tax rate applied in 29 percent. 
Passenger vehicles (diesel) measuring no more than four metre in length and having an engine of no more than 1,200 cc are taxed at 28 percent. With a compensation cess of three percent, the applied rate is 31 percent. Passenger vehicles with an engine of no more than 1,500 cc are taxed at 28 percent. With compensation cess of 17 percent, the applied rate is 45 percent. 
Passenger vehicles with an engine of more than 1,500 cc are taxed at 28 percent. With compensation cess, the applied rate is 48 percent. SUVs that measure above four metre in length, having an engine of more than 1,500 cc and a ground clearance of more than 170 mm are taxed at 28 percent. With compensation cess of 22 percent, the applied rate is 50 percent. 
Hybrid vehicles measuring up to four metre and having an engine of no more than 1,200 cc are taxed at 28 percent. Hybrid vehicles measuring more than four metre in length and having an engine of more than 1,200 cc (petrol) and 1,500 cc (diesel) are taxed at 28 percent. With compensation cess of 15 percent, the applied rate is 43 percent. 
Public transport vehicles of between 10 and 13 seats are taxed at 28 percent. With compensation cess of 15 percent, the applied rate is 43 percent. In the case of buses above 13 seats and goods transport vehicles, the applier GST rate is 28 percent. 
In the case of two- and three-wheelers the GST is 28 percent. With a compensation cess of three percent on two-wheelers above 350 cc, the applied rate for them is 28 percent. Electric vehicles, on the other hand, attract a GST of five percent. For hydrogen vehicles it is 12 percent. 
Besides GST plus compensation cess, there are other State Government and Union Government taxes such as the road tax, 18 percent GST on insurance (an insurance of three years is applied on some class of vehicles including two-wheelers at the time of purchase), toll tax, tax on fuel etc that effective push the tax percentage for every vehicle bought to a considerably higher level. 
The talk of luxury vehicles – which whether one should assume would be premium two-wheelers above 350 cc; passenger vehicles that measure more than four metre and have an petrol engine of more than 1,200 cc and a diesel engine of more than 1,500 cc, and hybrid vehicles measuring more than four metre in length and having an engine of more than 1,200 cc in petrol and 1,500 cc in diesel – being pushed to the 35 percent GST slab that is under consideration may elevate the tax percentage in the price tag to well above 50 percent. This is without including the other taxes mentioned above. 
An article in the Telegraphindia.com dated 4 December 2024 reports that the proposal of the Group of Ministers (GoM) for 35 percent GST for sin goods that are currently taxed at 28 percent has created uncertainty regarding the taxation of automobiles as well. This is particularly the case because they are taxed on par with sin goods like cigarettes and aerated drinks.
While the GoM is only a recommending body and the GST Council the ‘actual deciding’ organisation, an early clarity on whether automobiles/vehicles will be separated from sin goods as they contribute to people’s mobility and the nation’s supply chain would help it looks like.   
As a slowdown continues based on inflation, rise in input prices and operational expenses, the news of increase in some segments of small old and used vehicles as well as the proposal to elevate GST on sin goods from 28 percent to 35 percent is creating new reason for some sectors to worry about. The effect of such occurrence on the economy and on the market is necessary to consider as automobiles have always been described as luxury goods and taxed on par with sin goods, said an industry observer.
The demand of the auto sector to reduce GST on automobiles has never been entertained, which further emphasises that automobiles – even a commuter scooter or a truck – are considered as luxury goods bordering on sin goods, he added. 
The move to tax a section of the new vehicles such as those with a petrol engine of more than 1,200 cc and a diesel engine with more than 1,500 cc to 35 percent is certain to have a profound effect on the auto industry which is being pushed to become a key manufacturing hub in the world. 
The jump through various regulations has already affected the prices of vehicles across the last decade or two. It has made it hard for some aspiring individuals and families to even afford entry-level passenger vehicles.  
India has 34 cars per 1,000 people whereas key automotive markets that are also the key manufacturing hubs have up to 594 cars per 1,000 people. For India to be a key automotive manufacturing hub like China, the observer said, it must first create a market at home where high quality vehicles are taxed such that a larger section of population can afford them, use them and be truly a part of the economic progress the country is achieving. 
The demand for large cars and congestion in many Indian cities makes a ripe case of small cars, small electric cars being used as city commuting machines over two-wheelers, he added. 
“Excessive taxation on sectors like housing and automobiles should not create a situation where the hen that lay golden eggs was killed to find a treasure trove of gold but what was found was just a lifeless body of her,” he signed off. 
 

Image for representative purpose only. 

Comments (0)

ADD COMMENT

Link Copied!

Japanese automotive companies Honda Motor Co and Mitsubishi Motors Corporation have signed a Memorandum of Understanding (MoU) to develop a Honda pickup truck based on the Mitsubishi Triton.

The agreement marks the first product-supply initiative between the two manufacturers, with the new Honda model scheduled to enter the ASEAN market in 2028. The collaboration originates from a strategic partnership framework established in August 2024 among Honda, Mitsubishi Motors and Nissan Motor, which explores vehicle supply arrangements to expand product lineups across international markets.

As per the agreement, Honda will enter the pickup truck segment in the ASEAN region by utilising Mitsubishi's 1-tonne ladder-frame Triton platform. For Mitsubishi Motors, the OEM supply contract will increase production volumes and vehicle assembly capacity utilisation at its manufacturing facilities in Thailand. The three partner companies continue to examine additional vehicle supply and technology-sharing initiatives.

Comments (0)

ADD COMMENT

Link Copied!

Industry leaders at the Renewable Energy India Expo and The Battery Show India (TBSI) highlighted critical mineral access, technology partnerships and domestic manufacturing capabilities to strengthen India's electric vehicle supply chain.

The event convened over 1,080 exhibitors, 1,400 brands and 54,000 professionals, focusing on international collaboration across critical minerals, battery technology and energy storage.

Interestingly, Australia, represented by 20 companies and 32 exhibitors, identified battery production and electric vehicle supply chains as areas for cooperation with Indian manufacturers, leveraging its lithium, cobalt and rare earth reserves. Projections shared at the exhibition indicate India's renewable energy market will reach 486 GW by 2030, while the battery storage sector is projected to surpass USD 8.5 billion by 2031, growing at a compound annual growth rate of 33 percent.

Philip Green, Australia’s High Commissioner to India, said, "The two countries could combine Australia’s engineering expertise and mineral resources with India’s manufacturing strength and integration into global supply chains. Australia produces more than 50 percent of the world’s lithium, according to Green, and holds the world’s second-largest cobalt reserves. It also ranks second or third globally in rare earth resources." he said.

Yogesh Mudras, Managing Director of Informa Markets in India, said, "Renewable energy generation and grid storage needed to expand together as the country advanced its energy transition. India’s renewable energy market is projected to reach 486 GW by 2030, growing at a compound annual growth rate (CAGR) of 15 percent. The country’s battery storage sector is projected to exceed USD 8.5 billion by 2031, with a CAGR of 33 percent."

Anandi Iyer, Director of the Fraunhofer Office in India, said, "India and Germany had opportunities to collaborate in battery research, power electronics, advanced engineering and industrial automation. Approximately 800 GW of renewable energy capacity additions globally in 2025, while global battery storage deployment reached 108 GW, an increase of 40 per cent from the previous year. Technological self-reliance did not mean working in isolation, highlighting the importance of trusted partnerships and supply chains that can translate research into commercially viable solutions."

Manu Srivastav, Additional Chief Secretary in Madhya Pradesh’s Power & Renewable Energy Department, said, "Renewable energy was becoming increasingly competitive with conventional power as costs declined.”  

Jai Asundi, Executive Director of the Centre for Study of Science, Technology & Policy, said, "India would need continued investment in manufacturing, energy storage, grid infrastructure, research and skilled talent to build a resilient clean energy ecosystem."

Comments (0)

ADD COMMENT

Link Copied!

Caterham has confirmed its participation in the London International Motor Show 2027, with the British manufacturer set to appear in the event's Built in Britain zone at Excel London from 26 to 28 February 2027. The maker of the legendary Seven, produced in Britain since 1973, will display a selection of its cars on stand 1920.

Visitors will have the opportunity to examine one of the purest driving machines available anywhere, with the Seven widely regarded as a definitive British sports car thanks to its light, simple, hand-built construction in Kent and driver-focused engineering. The Built in Britain zone celebrates the designers, engineers and craftspeople sustaining the country's automotive industry, with specialist sports car makers playing a central role.

Though small in scale, these manufacturers wield enormous influence through cars whose character and focus are admired by major global firms and sought after by enthusiasts. The zone offers them a capital stage before a national audience. The show runs alongside Motorsport Expo and Car Culture UK, with one combined ticket covering all three and around 90,000 visitors expected across the weekend. Friday 26 February serves as the press and trade day, running alongside the public opening.

Stephen Maitland-Oxley, Event Director, London International Motor Show, said, “Caterham is exactly the kind of company Built in Britain was created to celebrate. The Seven is a British icon, and the team behind it has spent more than 50 years proving that lightness, ingenuity and sheer driving fun never go out of fashion. Britain's niche sports car makers are a national asset and we are delighted to give them the spotlight they deserve. Having Caterham with us is a wonderful way to set the tone for the zone.”

Trevor Steel, Senior Vice President – Operations, Caterham Cars, said, “ "At its core, the Caterham Seven is engineered to deliver a driving experience that is as pure, enjoyable and rewarding to the driver, as any car on sale today. Since its inception by Colin Chapman nearly 70 years ago, and since becoming a Caterham in 1973, the Seven has always been proudly built here in Britain, and this is heritage we’re always wishing to celebrate. Built in Britain is a natural home for us, and we are looking forward to meeting enthusiasts, owners and a new generation of drivers in London next February.”

Comments (0)

ADD COMMENT

Link Copied!

GP Petroleums has appointed Shirish Suvagia as its new Chief Financial Officer and Key Managerial Personnel, effective 15 October 2026.

Suvagia is a Chartered Accountant with over 23 years of experience in corporate finance, treasury, strategic planning, mergers & acquisitions, and debt and equity fundraising.

He holds Bachelor's and Master's degrees in Commerce from the University of Mumbai, an Executive MBA from IIM Indore, a CISA certification from ISACA, and an IFRS certification from the ICAI.

In his role as CFO, Suvagia will manage the company's financial strategy, treasury, business planning, capital allocation, risk management and reporting functions as GP Petroleums expands its IPOL lubricants brand across domestic and international markets.

Ayush Goel, Chairman & Managing Director of GP Petroleums, said, "We are delighted to welcome Suvagia to GP Petroleums. His experience across corporate finance, treasury, fundraising and mergers & acquisitions will be a valuable asset to the Company, particularly as we focus on capital allocation, business expansion and long-term value creation. We look forward to his contribution as we take the company forward. We are confident that his leadership and financial expertise will support the Company in creating sustainable value for all stakeholders."

"I am excited to join GP Petroleums at an important stage of its growth journey. IPOL is a well-established and respected brand with strong market fundamentals and significant opportunities ahead. I look forward to partnering with the Board and leadership team to further strengthen the Company's financial capabilities, support strategic growth initiatives, and drive long-term value creation for stakeholders," said Suvagia.

Comments (0)

ADD COMMENT

Link Copied!