RC Bhargava, chairman, Maruti SuzukiMaruti Suzuki Chairman RC Bhargava has welcomed the government’s decision to slash GST rates on small cars, calling it a landmark reform that could revive demand in India’s largest automobile segment.
Speaking after the GST Council cut rates on small petrol, LPG and CNG cars under 1,200 cc and 4,000 mm length, and diesel cars under 1,500 cc and 4,000 mm length, from 28 per cent to 18 per cent, Bhargava said the move would restore affordability for buyers. Larger cars will now attract 40 per cent tax, with the earlier cess scrapped.
“This reform measure is not for one month or two months, it is a long-term measure which will impact the economy as we go along. I expect that the small car segment, which accounts for about 70 per cent of Maruti’s sales, will gather a growth rate of close to 10 per cent a year. The industry as a whole will start growing at around 7–8 per cent annually,” he told Business Standard.
Maruti on price cut
Bhargava said prices of Maruti’s Alto could drop by ₹40,000–₹50,000, while the WagonR may see cuts of ₹60,000–₹67,000. He noted, however, that car prices may decline by about 9 per cent, not the full 10 per cent, as automakers would still factor in transportation costs and dealer margins. The veteran industry leader described the GST cuts as timely, but cautioned that their immediate impact would be limited due to the short time left in the current fiscal. “The festival season is upon us and there is only that much which can happen in this short period. But the long-term effect will be very positive,” he said.
The auto industry has faced subdued demand and rising costs in recent months. Bhargava said the government’s move could bring “butter back on the plate” for automakers, boosting growth after several difficult years.
