The strong demand highlights how the combination of auspicious timing and price benefits under GST reforms have boosted customer confidence.The festive season has got off to a strong start for the automobile industry as customers thronged car showrooms on the first day of Navratri.
The rollout of the new GST 2.0 reforms, which have reduced car prices, added further fuel to the festive buying sentiment. The twin impact of the festival and lower prices led to a remarkable performance for Maruti Suzuki.
“The response from customers has been phenomenal–something we haven’t seen in the last 35 years. On the very first day, we recorded 80,000 enquiries, and have already delivered over 25,000 cars, with deliveries expected to touch 30,000 shortly. Since September 18, when we announced additional price reduction (over and above GST), we have received 75,000 bookings, with nearly 15,000 bookings coming in every day–about 50% higher than usual. Demand for small cars has been especially strong, with bookings growing by nearly 50%,” said Partho Banerjee, Senior Executive Officer, Marketing and Sales, Maruti Suzuki.
“Enquiries remain very high, and we may even run out of stock for certain variants. Dealers are staying open late into the night to deliver cars to customers. Compared to last year, the overall response has been exceptionally strong,” he added.
At a Maruti showroom in Chennai, managers highlighted the benefits consumers will be getting as the GST rate rationalisation comes into effect. According to the showroom’s manager, Sivaraj, around 2 thousand cars have already been booked in September due to the reduction in slabs.
“In the past month, more than 2 thousand bookings have been taken because of GST rate cut. Today is where the new prices have come in,” the manager told ANI.”Before GST minimum cost of the car will be around 4.5 lakh, now it will be reduced to 3.4 lakh,” he added.
The company has also released a special offer during Diwali. The manager also mentioned that people could also prefer to spend a little more and buy a four wheeler instead of a two wheeler.
“Within 4.5 lakhs we can buy a car. For example, if you go to a two wheeler showroom, the price will be around 2 lakhs, but with an additional 2 lakhs they will buy a car. Now the GST reduction will be very useful to the users to buy a car,” he added.
The strong demand highlights how the combination of auspicious timing and price benefits under GST reforms have boosted customer confidence.
The trend could continue through the festive season, with carmakers expected to benefit from improved affordability under the GST 2.0 reforms. For small cars, the GST rate has been reduced to 18 per cent from 28 per cent.
The small car encompasses petrol engine cars of less than 1200 cc and not exceeding 4 metres in length, and diesel cars of less than 1500 cc and not exceeding 4 metres in length. For large cars, however, GST is tagged at a flat 40 per cent with no cess.
For two-wheelers, including bikes up to 350cc, the GST rate has been reduced from 28 per cent to 18 per cent. For the agricultural sector, tractors, which were previously taxed at 12 per cent GST, will now be taxed at 5 per cent. Tractor tyres and parts, which were in the 18 per cent slab, have also been brought down to 5 per cent.
For buses with a seating capacity of 10 plus persons, GST has been reduced from 28 per cent to 18 per cent. The majority of the components used for the manufacture of motorcars and motorbikes have also been reduced by 18 per cent.
In a historic move to simplify the Goods and Services Tax(GST), GST Council in its 56th meeting has reduced the GST structure from four slabs (5%, 12%, 18%, 28%) to two main rates–5% (merit rate) and 18 per cent (standard rate) along with a 40 per cent special rate for sin/luxury goods.These changes came into effect from September 22, 2025.
