Despite Increased GST Rates Volvo Cars Will Continue To Push For Hybrids

Volvo Cars has said it will continue to push for hybrid and electric vehicles in India despite disappointing high tax rate on such vehicles under GST.



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Published on July 12, 2017

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  • Volvo disappointed with the high GST rate on hybrid vehicles in India
  • From 2019 all new Volvo models will have an electric motor
  • Hybrid vehicles now come under that 28% GST slab plus 15% cess

Swedish auto manufacturer Volvo Cars today said it will continue to push for hybrid and electric vehicles in India despite disappointing high tax rate on such vehicles under GST. The company -- which had last week announced that from 2019 all its new models will have an electric motor, putting an end to cars that only have an internal combustion engine (ICE) -- also said it would try to bring such new vehicles to India as soon as possible after global launches.

"Yes, I am bit disappointed with the high GST rate on hybrid vehicles as it is not in line with the government's push for environment friendly vehicles," Volvo Auto India Managing Director Tom von Bonsdorff told PTI.

Under the new tax regime, hybrid vehicles are on the same slab as luxury cars at 28 per cent GST plus 15 per cent cess at present. At 43 per cent, total tax incidence on these vehicles is higher from the previous effective tax rate of 30.3 per cent. "This does not change our commitment to eco-friendly vehicles and to develop hybrid and electric vehicles. We, however, hope that the government will have a rethink on the tax rates on hybrids in order make them more affordable," he said. When asked if Volvo Cars will launch hybrid or electric vehicles in India, in line with the global announcement from 2019, Bonsdorff said, "We will try to bring them as soon as possible in India after the global launch".

volvo xc90 hybrid
Volvo XC90 T8 is the only plug-in hybrid SUV in India as of now

Volvo Cars had announced that it would launch five fully electric cars between 2019 and 2021, three of which will be Volvo models and two high performance electrified cars from the stable of its performance car arm, Polestar. All these five cars will be supplemented by a range of petrol and diesel plug in hybrid and mild hybrid 48 volt options on all models, the company had stated. Expressing optimism on electric cars, Bonsdorff said: "The government's plans to have an all-electric car fleet by 2030 goes in hand with Volvo Cars' global vision. We are looking forward to that direction".

volvo v90 cross country launch
The Volvo V90 Cross Country was launched in India at Rs. 60 lakh

The company already sells its plug-in hybrid SUV XC90 Excellence in India priced at Rs. 1.28 crore. Volvo Auto India today launched an all-new version of its crossover model V90 Cross Country priced at Rs. 60 lakh (ex-showroom). The model is powered by a twin-turbo diesel engine that delivers power of 235 hp coupled with an 8-Speed gearbox with paddle shifts.

It is also equipped with radar-based safety features such as lane keeping-aid, collision warning with full auto-braking for pedestrians, cyclists, other vehicles and large animals. The new vehicle also has blind-spot detection with cross traffic alert; rear collision warning and park pilot assist features. "The car has remarkable off-road performance, on-road comfort and luxury. It is designed for Indian road conditions and is in sync with the new-age luxury customer's lifestyle of seeking a weekend escape," Bonsdorff said.

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