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Informist, Thursday, Sept. 18, 2025

 

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--Maruti Suzuki: GST rejig, tax break, repo rate cut to boost auto industry
--CONTEXT: Comments by Maruti Suzuki mgmt in virtual press conference 
--Maruti Suzuki: Net effect of 10% cut in GST 8.5% on car prices
--Maruti Suzuki: Will compensate channel partners for the cut in car prices
--Maruti Suzuki: Will see effect of recent pent-up demand in Oct auto sales
--Maruti Suzuki: Discount on entry level cars will be applicable till Dec 31
 

 

NEW DELHI – India's largest passenger vehicle maker Maruti Suzuki India Ltd. has reduced prices of its entry level cars at a higher rate than the 10% cut in goods and services tax in order to spur offtake, which has been plagued by affordability issues and increased preference for larger utility vehicles. "We have now priced the entry level cars in a way that affordability is no more a challenge, we are very hopeful that this is going to really kick start the motorisation of Indian auto industry," Executive Director Partho Banerjee told reporters in a press conference on Thursday.

Smaller cars currently attract a GST of 28% in addition to compensation cess ranging from 1-2%. This will be cut to a flat rate of 18% from Sept. 22. "Due to GST cut, the net effect is 8.5%. We have gone for further special offer to two-wheeler customers, so that they can upgrade to a four-wheeler," Banerjee said.

 

Maruti Suzuki is offering a much higher discount than the 8.5%, net effect of the GST cut, on certain cars. For example, the discount on its S-Presso passenger car starts from 12.6% and goes up to 17.5%. Discounts on the Alto start from around 11% and go up to 20%. These discounts will be applicable till Dec. 31, after which the company will reassess the situation. Maruti Suzuki will compensate its channel partners for these discounts.

 

Given these discounts, Maruti Suzuki expects demand for automobiles to increase in the coming months. "There is going to be a pent up demand. Most of the customers held back their purchase decision in August, they all are going to come to the market in the month of October," Banerjee said. He cautioned against reading too much into the higher auto sales figures in the coming months.

 

The executive gave the example of countries like Japan which saw a robust uptick in demand for automobiles many decades ago when the "motorisation revolution" began. Banerjee said the GST rate rejig, income tax break announced in the Budget, and the repo rate cuts by the Reserve Bank of India's rate-setting panel can kickstart a similar motorisation trend in India. Maruti Suzuki expects auto sales in India to revert to 6-7% mark next financial year onwards. On Thursday, the company's shares closed 0.1% higher at INR 15,817 on the National Stock Exchange.  End

 

Reported by Anand JC

Edited by Ashish Shirke

 

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