The Hindu Business Line : Rising rupee: Hyundai to take Rs 156-cr hit this year

Chennai, Oct. 11 Hyundai Motor India Ltd will lose Rs 156 crore this year due to the rupee appreciation against the dollar. This works out to Rs 13,000 per car. In the first eight months of the year, the car manufacturer lost Rs 102 crore due to rupee appreciation.

In addition, the company is losing Rs 8,262 per car due to taxes/levies, and the amount is ‘non-rebatable’ by the Government. The hit due to currency appreciation and non-rebatable taxes that each exported car has to bear works out to Rs 21,262 a car, the company said.

The company has taken up this issue with the Director General of Foreign Trade through the Federation of Indian Export Organisation, and sought a system of rebate on duties and levies.

Hyundai said that the Government should evolve a system for rebating duties/levies suffered by the export product immediately or otherwise export from India will suffer in due course. “Exporting goods with duties is against the natural principle of the Government,” the company said. The car manufacturer has sought Rs 8,262 per car as reimbursement from the Government on account of various taxes paid. The reimbursement sought was a percentage of f.o.b. (freight on board) value of export. This is not rebated by the Government in any of their schemes, including duty drawback of 4.13 per cent of f.o.b. value.

Business Line recently reported that Hyundai’s target for 2007 is to export 1.15 lakh cars against 1.13 lakh cars exported in 2006, an 1.5 per cent increase. However, this plan itself will have to be re-worked in the light of appreciation of rupee. In 2008, when the company’s second plant will be in production, Hyundai’s preliminary plan is to export 2.5 lakh cars.

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