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The country’s largest passenger carmaker Maruti Suzuki India Ltd (MSIL) said sales of its mid-size sedan Ciaz and Ertiga’s diesel smart-hybrid version have declined after the Centre withdrew cess on such vehicles following the GST rollout on July 1.
Earlier, hybrid cars such as Maruti Ciaz and Toyota Camry had taxes of around 30 per cent, which were even lower in markets like Delhi.
However, after GST, the government has decided to bring these vehicles in the same tax bracket as luxury cars – 43 per cent, including a 15 per cent cess – which has led to price increases and lower demand for hybrid cars.
“I don’t know the exact numbers, but what I understand is sales of diesel hybrid (Ciaz and Ertiga) have come down. The hybrid was one case where the government actually increased the tax after GST. So that has impacted the sales numbers,” RC Bhargava, Chairman, MSIL, told BusinessLine .
However, he added that Ciaz had marginally made up with an increase in sales of the petrol version. But in Ertiga that has not happened.
According to RS Kalsi, Senior Executive Director, Marketing and Sales at MSIL, the new taxes have pushed up prices of Ciaz’s diesel versionby ₹60,000-₹80,000. “Therefore, depending on the pricing, customers are certainly going for the petrol version,” Kalsi said, adding that the diesel-petrol sales ratio has become 30:70 against the earlier 50:50.
Total sales upHowever, in terms of total sales of Ciaz and Ertiga, the company is still getting good traction, and sells more than 6,000 units a month. In August, it sold 6,457 units of Ciaz and 6,076 units of Ertiga.
Competitive segmentCiaz, which is being sold through the company’s premium Nexa outlets, is in one of the most competitive segments, pitted against the likes of Hyundai Verna and Honda City.
Both Verna and City have come out with newer versions, and are gathering good numbers. While Honda sells around 5,500 units of City every month, Hyundai has sold 13,500 units of the recently launched version of the Verna.
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