Levying a 'green GST (goods and services tax)' on cars-where the tax rate goes up or down based on the vehicle's emission levels-will be the ideal path towards achieving carbon neutrality, said Vikram Pawah, president of BMW Group India.
The gradient will incline consumers towards buying greener cars, he told ET.
"Ideally there should be a green GST...the greener the car, the lower is the GST," Pawah said on the sidelines of the launch of the BMW M4 CS high-performance sedan in Mumbai.
"If you have that gradient, people will automatically choose and migrate towards green cars," he said. "I've always said this, and I have openly requested the government to look at a green GST regime. I think that will benefit more, instead of the size of the car or size of the engine. You then really move towards the aim that we have for the economy-to become carbon neutral. This would help in bringing more latest technologies available for a customer (at an affordable price)."
Priced at INR 1.89 crore (ex-showroom in Mumbai), the M4 CS is the 25th new model launched by the German luxury carmaker in India in the current calendar year.
The firm expects the year to be a record one in terms of volume sales, Pawah said. BMW is the market leader in luxury EVs. The electrified version of the S Class has a penetration as high as 40%.
However, when asked if the firm has plans to introduce PHEVs (plug-in hybrid electric vehicles), or strong hybrids, in India, Pawah said BMW is not considering it in the absence of any incentives for an expensive technology like PHEVs.
To be sure, his views are divergent from that of BMW's arch-rival Mercedes-Benz, which believes incentivising hybrids will slow pure EVs. BMW, though, maintains that it is technology agnostic. "The agenda should be to move towards full green and EVs should be taxed the lowest-lower than hybrids," Pawah said.
"But, yes, if there's a gradient of benefit that a customer gets-the greener they go the more benefit they get-it would help in achieving the final goal."
BMW Group India sold 10,556 cars (including BMW and Mini brands) in the first nine months of 2024, up 10% over the corresponding period. It sold 725 e-cars in the same period. BMW sells half a dozen electric cars in India including the i7, i5, i4, iX, iX1 and Mini Countryman.
The company said both the top end (includes the X7) and bottom end (includes X1) of its product portfolio are contributing equally to the total sales. It said it is changing the game with its long wheelbase product portfolio and a strong electric mobility offensive.
"Our aim is to grow both the segments and be a leader in each," Pawah said.
India remains a small market for luxury cars with such models accounting for less than 2% of the total car sales. In 2023, led by Mercedes-Benz, an estimated 45,000 luxury cars were sold in the country, up 20.5% over 2022.
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