GST cuts have brought in a new lifeline for the auto industry battling stricter emission norms, costs and more. These price revisions have helped market sentiments while changing buyer response as in anticipation, sales were affected for the last month. Tata Motors sold around 10,000 cars on the first day of Navratri while Maruti Suzuki sold a whopping 30,000 units while Hyundai sold 11,000 units. Maruti Suzuki has seen a huge increase in dealership enquiries and a massive 50 percent increase in bookings.
The same sales can be expected from other carmakers too in the coming days as we willl get positive numbers with the festive season upon us. This will further help increase car sales and boost demand which was the main idea behind these GST cuts. However, the question is whether the demand would be sustained. Car prices have been increasing and tighter emissions, E20 fuel dilemma and more have been adding questions to the buyers minds. The auto industry has been grappling lacklustre demand and keeping prices under check yet with tightening emissions, many are now flocking to higher priced SUVs for volumes.
However, the GST cuts have made cars more affordable although yet again whether the small car segment will bounce back in a big way remains to be seen. These GST cuts for ICE cars and SUVs might also affect EV demand as potential buyers of EVs might get back to ICE owing to the lower prices. Going forward, manufacturers are confident that sustained demand will come back although new products will continue to be the need of the hour as carmakers are going after volume centric segments like compact SUVs.
