Summary
India’s GST cut on smaller sized cars might prefer micro SUVs. Market professionals forecast increased need for designs like Tata Punch and Maruti Fronx. These SUVs use attractive functions and styling at competitive costs. While Maruti Suzuki prepares for development in the hatchback section, the general pattern recommends a shift towards SUVs.
It will be the micro SUVs, and not the mini budget-friendly cars and trucks, that are most likely to benefit the most from the federal government’s choice to cut GST on smaller sized automobiles, ToI reported mentioning business authorities and market specialists.
While Maruti Suzuki, the nation’s most significant seller of tiny automobiles, is positive that hatchbacks will get an increase from the lower tax on little automobiles, much of the market thinks micro SUVs– which are priced near hatchbacks, and sometimes even lower for specific versions– will become the genuine winners.
The federal government has actually lowered GST on the little vehicle classification to 18% from the existing 28% (plus 1% cess on gas variations and 3% on diesel). This classification covers designs under 4 metres in length with fuel engines listed below 1200cc or diesel motor listed below 1500cc. Automobiles consisted of variety from hatchbacks such as Maruti’s Alto and Celerio, Renault’s Kwid and Hyundai’s Nios, to mini SUVs such as Tata’s Punch, Maruti’s Fronx and Hyundai’s Exter, along with sedans like Maruti’s Dzire and Honda’s Amaze.
Market specialists state the strong choice for SUV-shaped designs, with greater ground clearance, more functions and more powerful styling, will imply the benefit of the tax cut will stream more towards micro SUVs.
Tarun Garg, COO of Hyundai India, informed ToI there will be “no modification in purchaser choice” as need will peak for smaller sized SUVs. “People desire SUV styling, greater ground clearance, and functions like sunroof and 6 air bags. The brand-new smaller sized SUVs look excellent, they have much better functions, and come almost at the very same rate as that of hatchbacks. They will be the winners, though some brand-new consumers will likewise go for the base versions in the hatch section.”
Sales information currently reveal the pattern. The share of hatchbacks in overall automobile sales has actually fallen from 50% in 2015 to simply 22% up until now in 2025, while SUVs have actually grown from 13.5% to 54% in the very same duration.
Business state the SUV rise shows up throughout the board– from smaller sized designs to superior SUVs such as Hyundai’s Creta and Mahindra’s XUV7OO and Thar, to high-end lorries from BMW and Mercedes-Benz. “It will be no various in smaller sized cars and trucks with need anticipated to soar for designs such as Tata Punch and Maruti Fronx which will end up being extremely appealing post the GST cost cuts,” an expert stated.
Maruti Suzuki does not concur that SUVs will sweep the advantage alone. “We think that versus a decrease of 6%, the mini and hatchback sector cars and trucks will grow by 10% after the GST cuts,” Partho Banerjee, senior executive officer (marketing & & sales) at Maruti Suzuki, stated.
