Following the GST Council's recent reforms, Hyundai Motor India has announced a reduction in prices across its passenger vehicle lineup, with cuts reaching up to ₹2.4 lakh. These revised prices will be effective from September 22, 2025. The company's decision to pass on the benefits of the Goods and Services Tax (GST) rate reduction to customers aims to boost sales during the festive season.
Impact of GST Reforms
The GST Council, in its 56th meeting on September 3, 2025, introduced GST 2.0, a reform designed to enhance affordability and streamline tax rates in the automotive sector. A key change is the reduction of GST on small cars, motorcycles up to 350cc, three-wheelers, buses, trucks, and ambulances from 28% to 18%. Small cars are defined as vehicles under four meters in length with engines up to 1,200cc (petrol) or 1,500cc (diesel). Conversely, larger cars exceeding these specifications, along with motorcycles above 350cc, will be subject to a higher 40% GST. For the agriculture sector, GST on tractors and other farm machinery has been reduced from 12% to 5%, while all auto components will attract a flat 18% GST.
Hyundai's Price Reductions
Hyundai Motor India has swiftly aligned with the reform, announcing significant price cuts across its portfolio:
These price revisions reflect Hyundai's commitment to passing on the full benefits of the GST rate cuts to consumers.
Broader Market Impact
The GST rate cuts are expected to have a wide-ranging impact on the Indian automotive market. Small cars and entry-level motorcycles will become significantly cheaper, with models like the Maruti Swift, Hyundai i20, and Tata Altroz set to see lower prices. The reduction in GST for smaller vehicles is particularly beneficial for first-time buyers and middle-income families. Compact SUVs like the Hyundai Venue and Maruti Brezza will also see price reductions.
Conversely, larger cars and SUVs will now fall under a 40% GST slab. While this may seem like an increase, it's important to note that the previous tax structure included a compensation cess, effectively pushing the overall levy to around 48 to 50%. The new flat rate of 40% simplifies the tax structure and, in many cases, reduces the overall tax burden.
Expert Opinions
Unsoo Kim, Managing Director of Hyundai Motor India, welcomed the GST reforms, stating that they will provide a strong impetus to the Indian economy, enhance buoyancy, and further strengthen consumer confidence. He added that the reforms align seamlessly with the government's commitment to "Viksit Bharat" and the "Make in India" initiative, encouraging domestic manufacturing and boosting demand across both urban and rural markets.
Conclusion
Hyundai's decision to cut prices by up to ₹2.4 lakh following the GST reduction is a significant move that is expected to stimulate demand and benefit consumers. The GST reforms, effective September 22, 2025, aim to simplify the tax structure and enhance affordability in the automotive sector. While small cars and entry-level motorcycles will see the most significant price reductions, larger cars and SUVs will also experience some relief. Overall, these changes are expected to boost the Indian auto sector and provide relief to first-time buyers and middle-income families.
