Shares of Maruti Suzuki India Ltd jumped over 7% to hit an intraday high of ₹12,880 a piece, emerging as the top gainer on the Nifty Index on Tuesday, July 9.
This gain came in response to the Uttar Pradesh government's announcement of a complete waiver of registration tax on strong hybrid electric cars (HEVs) and plug-in hybrid electric vehicles (PHEVs), effective immediately. This policy shift is expected to drive greater adoption of hybrid vehicles, benefiting manufacturers like Maruti Suzuki.
Maruti Suzuki India's stock opened the day's trade at ₹12,325, significantly above its previous closing price of ₹12,023.6. During the morning session, the stock surged to reach an intraday high of ₹12,880. At 1:30 pm, Maruti Suzuki India shares traded 7.08% higher at ₹12,874.80 following minor corrections from the day's peak.
The Uttar Pradesh government announced this waiver as part of the efforts to promote environment-friendly vehicles. Effective immediately, it is expected to benefit not only Maruti Suzuki but also other automakers like Honda Cars India and Toyota Kirloskar Motor.
For Maruti Suzuki, the move is particularly advantageous for its Grand Vitara SUV and Invicto MPV, both of which feature strong hybrid technology. Buyers in Uttar Pradesh can now save over ₹3 lakh on the Maruti Suzuki Invicto and more than ₹2 lakh on the Maruti Suzuki Grand Vitara, making these models more accessible and attractive to consumers in the state.
The UP government usually charges an 8% road tax on vehicles costing less than ₹10 lakh and 10% on those exceeding ₹10 lakh (ex-showroom). According to the Federation of Automobile Dealers Associations (FADA), Uttar Pradesh is one of the largest markets for passenger vehicles in India.
In the first half of this year, retail sales in the state reached 2,36,097 units, marking a 13.46% increase from the 2,08,092 units sold in the same period last year. The second quarter alone saw sales of 1,09,712 units, reflecting a 10.26% growth compared to 99,501 units in Q2 of the previous year.
This tax waiver will further stimulate the market, enhancing the appeal of hybrid vehicles and potentially driving higher sales for manufacturers capitalising on this eco-friendly shift.
So far this year, Maruti Suzuki India's shares have risen by more than 25%, surpassing the 12% increase in the benchmark Nifty 50 index.
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