A major tax change is shaking up the Indian auto market, making small cars more affordable than they’ve been in years.
Thank you for reading this post, don't forget to subscribe!On Monday, a new GST rate of 18% went into effect for small cars, replacing the old tax of 29-31%. This has allowed automakers to slash prices, with some models now starting below ₹4 lakh.
Here’s a look at the impact:
- Maruti Suzuki S-Presso, for example, is now priced at ₹3.49 lakh, which is a massive drop from its previous price of ₹4.26 lakh.
- Two-wheelers are also seeing benefits, with price cuts of up to ₹7,000 on entry-level bikes.
- Automakers like Maruti Suzuki and Hero MotoCorp are already seeing a “huge spike in enquiry levels” and “buzzing showrooms.” They expect the trend to continue, especially with the festive season and a good monsoon boosting consumer confidence.
This is a significant moment for the small car segment, which has seen its market share shrink for five years in a row. Now, with prices becoming more accessible, the industry is optimistic about a strong recovery.
