New Delhi: Car market leader Maruti Suzuki India expects domestic passenger vehicle sales growth to come back to around 7 per cent from the next fiscal following reduction in GST rates on automobiles, a senior company official said on Thursday.
For the small car segment, in which the company has a dominant position, the growth expectation is around 10 per cent, Maruti Suzuki India Senior Executive Officer, Marketing & Sales, Partho Banerjee told reporters here on the sidelines of the annual convention of Society of Indian Automobile Manufacturers (SIAM).
"The long-term growth CAGR, which used to be around 7 per cent for the Indian auto industry, we feel it will go back to that again from 2026-27," he said when asked about the impact of GST rate reduction on auto sales growth.
For small cars, he said,"We are expecting that it should go at 10 per cent." A combination of factors, including income tax relief on annual income of up to Rs 12 lakh, transmission of the impact of repo rate cuts by RBI on the ground making EMIs lesser, besides the GST rate reduction, will help in making small cars more affordable thereby encouraging two-wheeler riders to upgrade, he noted.
"We see this is a big opportunity for all the two-wheeler customers to upgrade to a four-wheeler," he said.Domestic passenger vehicle (PV) sales have slowed down in the past couple of years, specially in the small car segment due to affordability issues.As per industry estimates, in the April-August period this fiscal, PV sales were at around 17.05 lakh units as compared to 17.31 lakh units in the year-ago period.
Banerjee said sales are expected to bounce back in the later part of the ongoing fiscal after the GST rate reduction.Since the GST rate cuts were announced, inquiries have grown by 15 per cent despite being in the "inauspicious period" of Shraadh and the market sentiment is buoyant, he noted.Banerjee also said the company has already announced passing on the benefits of GST rate reduction to customers.
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