India’s passenger vehicle market is witnessing a surge in activity. The reduction in GST rates has had a positive impact on sales and consumer spending. Major automobile manufacturers, including Maruti Suzuki, Hyundai, and Mahindra, are reporting increased foot traffic and a rise in bookings. Recent data indicates a significant increase in bookings compared to the preceding weeks, with an approximate fourfold rise.
The surge in bookings is linked to strategic inventory management before the GST revisions. Companies and dealers focused on clearing existing stock in anticipation of the new pricing. With GST now at 18% for smaller cars and sub-4 meter SUVs (down from the previous 28% plus cess), consumers are experiencing substantial savings, ranging from 8.5% to 10%.
The upcoming festive season, including Navratri and the approaching Dhanteras and Diwali, is further fueling this positive momentum. Early reports from Navratri show robust customer interest, with sales expected to be significantly higher than last year. Sales could potentially double if supply chain and financing issues are quickly addressed.
Maruti Suzuki’s daily bookings have increased to 15,000 units, from 10,000, with 30,000 vehicles delivered on the first day of Navratri. Tata Motors also saw strong performance with 10,000 vehicle deliveries at the start of the festive season, confirming the positive impact of the GST rate reductions.