Maruti Suzuki S-Presso Maruti Suzuki India Limited (MSIL) has seen the share of small car sales rise sharply to 22.2 per cent of total sales, up from 16.7 per cent in the period before the goods and services tax (GST) rate cut, the company said according to a report by Business Standard.
Senior Executive Officer (Marketing and Sales) Partho Banerjee said the surge comes after MSIL announced price cuts on its cars on September 18, which came into effect from September 22, coinciding with the new lower GST rates.
“Since the announcement, MSIL has received about 400,000 bookings, averaging 100,000 per week – the highest ever rate of bookings for the company,” Banerjee said during an audio press conference. Of these bookings, roughly 80,000 are for small cars.
The small car segment in India had been declining in recent years due to rising prices from new safety and emission regulations and the growing popularity of SUVs. The GST rate cut, which reduced tax on small cars (under four metres in length, engines up to 1,200 cc for petrol and 1,500 cc for diesel) to 18 per cent from the earlier 29-31 per cent, has reversed this trend, Banerjee said.
“Our production team is even working on Sundays to meet the high demand,” he added. He also noted that two-wheeler owners are increasingly visiting car showrooms following the GST reduction. “We are seeing a lot of people with helmets visiting our showrooms,” Banerjee said.
Under the new GST regime, larger cars – over four metres in length with engines above 1,500 cc and ground clearance above 170 mm – are taxed at 40 per cent, down from the earlier effective 50 per cent. The Centre has also withdrawn the compensation cess.
The company attributed the spike in small car sales to both the reduced GST rates and MSIL’s price adjustments, signalling renewed interest in the segment after several years of decline.
