NEW DELHI: Maruti Suzuki India, the country’s leading carmaker, expects domestic passenger vehicle (PV) sales growth to return to around 7% in the next fiscal year following the recent reduction in GST rates on automobiles, a senior company executive said on Thursday.
For the small car segment, where the company holds a dominant position, growth is projected at approximately 10%, Maruti Suzuki India Senior Executive Officer for Marketing & Sales, Partho Banerjee, told reporters on the sidelines of the annual convention of the Society of Indian Automobile Manufacturers (SIAM).
“The long-term industry growth CAGR, which has historically been around 7%, is likely to return to that level from 2026-27,” Banerjee said when asked about the impact of GST cuts on auto sales. “For small cars, we expect growth of about 10%.”
He added that a combination of factors—including income tax relief on annual earnings up to ₹12 lakh, the RBI’s repo rate cuts reducing EMIs, and the GST rate reduction—would make small cars more affordable and encourage two-wheeler owners to upgrade to four-wheelers. “We see this as a significant opportunity for two-wheeler customers to move up to a car,” he noted.
Domestic PV sales have slowed over the past few years, particularly in the small car segment, mainly due to affordability concerns. Industry estimates indicate that PV sales stood at around 17.05 lakh units in April–August this fiscal, slightly lower than 17.31 lakh units in the same period last year.
Banerjee said sales are expected to recover in the latter part of the ongoing fiscal following the GST rate reduction. He noted that inquiries have already risen by 15% since the cuts were announced, despite the “inauspicious period” of Shraadh, and market sentiment remains optimistic. The company has also confirmed that it will pass on the benefits of the GST reduction to customers.
