Hyundai asks SIAM to sort small car issue

Hyundai Motor India, the second-largest car maker, has asked industry body Society of Indian Automobile Manufacturers (SIAM) to present before the government the case for removal of confusion on the length of small cars eligible for excise duty sops.

While the finance ministry has kept the length of a small car at 4,000 mm for excise duty benefits, the auto policy by the ministry of heavy industries pegs the length at 3,800 mm.

Sources said Hyundai wants the definition of the finance ministry to prevail on the issue.

Since Hyundai has developed its small cars based on the current definition of 4,000 mm, it could lose out on the excise benefit if the length were to be altered to 3,800 mm as per the auto policy. Its model such as Getz could be falling out of the category, they said.

It is also learnt the company was unhappy over SIAM's silence on the issue, especially when no mention was made about it in the pre-budget wish-list of the industry body.

While Hyundai officials declined to comment, SIAM Director General Dilip Chenoy confirmed that the issue was taken up by Hyundai. He, however, said SIAM had asked for a uniform excise rate of 16% for all passenger vehicles irrespective of its length.

In Budget 2006, the excise duty on small cars were reduced to 16% from 24%. Small cars were defined as petrol cars with an engine capacity not exceeding 1,200 cc and not exceeding 4,000 mm in length, and diesel cars of engine capacity not exceeding 1,500 cc and not exceeding 4,000 mm in length.