New Delhi: Leading car sellers in India Maruti Suzuki and Hyundai Motor India has said that they expect a resurgence in the automobile sales as Goods and Services Tax (GST) reforms reduce vehicle prices
by 3.5–13 per cent, amidst festive demand.
The country’s largest carmaker Maruti Suzuki India forecasted that the sector will return to a long-term growth rate of 7 per cent by FY27, supported by reduced car prices. At a SIAM event in the national capital, Partho Banerjee, senior executive officer, marketing and sales, Maruti Suzuki said that the company has seen a jump in inquiries by 15 per cent since August 15 when Prime Minister Narendra Modi indicated towards GST rate rationalisation.
Banerjee said that the GST cut has resulted in a 3.5 to 8.5 per cent price reduction across their range from small cars to larger ones. “India’s car penetration stands at 34 cars per 1,000 people, compared to 700-800 cars per thousand people in developed countries. If the penetration moves up to 44 per 1,000 as well, there is huge room for growth,” he said.
Further, the income tax relief (for individuals earning up to Rs 12 lakh) and transmission of repo rate cuts could increase disposable income and bring down the EMIs. Meanwhile, Hyundai Motor India expects its small SUV segment to witness the highest growth following the GST reforms. Hyundai Motor India Whole-Time Director and Chief Operating Officer Tarun Garg said that price cuts will be 11-13 per cent on small cars and 3-10 per cent on large models.
The company announced that the price of Exter will be reduced by up to Rs 89,209, the Venue by up to Rs 1.23 lakh, and the Creta by up to Rs 72,145, with new prices taking effect on September 22. Compensation cess has been eliminated under the new structure, establishing two GST slabs for internal combustion cars: 18 per cent for small models and 40 per cent for larger and luxury vehicles.
Prior to restructuring, all internal combustion engine (ICE) cars attracted a GST of 28 per cent in addition to a compensation cess of 1-22 per cent, depending on the length, engine capacity and body style.
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