Hyundai blows whistle on small car norm

Hyundai blows whistle on small car norm

Author | Source: Business Standard | Wednesday, Jan 24,2007 8:34 AM

Hyundai blows whistle on small car norm

In what signals an emerging battle among small car manufacturers, Hyundai Motors India Ltd (HMIL) has asked the country's apex auto association to act against moves by “some pressure groups” to change the definition of a small car.

A change in definition could jeopardise the Korean company’s plans to launch a premium 1.1-litre hatchback car codenamed Pa and lead to huge revenue losses on account of higher excise obligations.

In a letter written to the director general of the Society of Indian Automobile Manufacturers, HMIL Managing Director H S Lheem alleged that vested interests were lobbying the Ministry of Heavy Industry to reduce the stipulated length limit for a small car from the current 4 m to 3.8 m.

Small cars, which include the Santro, Maruti Alto and Wagon R, attract an excise duty of 16 per cent, against 24 per cent for large cars.

Lheem’s letter went on to say, “The entire effort and investment that has gone into making a particular model [would] go waste” as a result of any change in norm.

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