NDTV Exclusive: Maruti Expects 16% Growth In Small Car Sales After GST 2.0

New Delhi: Maruti Suzuki India at the NDTV GST Conclave on Tuesday said the revision in GST on small cars will spur growth, and expects the segment to flourish from -6 per cent to +10 per cent. Calling the GST revision a 'gift' from the government to consumers, Maruti Suzuki also said it will pass on the entire benefit of tax reduction. Finance Minister Nirmala Sitharaman hailed Maruti Suzuki's commitment towards customers, calling the people of India also expects this spirit from the manufacturers.

The GST council has taken bold measures, reforming the taxation on automobiles. Small cars under 4 metres in length and with engine capacity under 1200-cc for petrol and 1500-cc for diesel have been moved from 28 per cent GST plus 1-3 per cent cess to 18 per cent GST. Other four-wheelers, comprising sedans, SUVs and luxury cars, attracted 28 per cent GST with an additional 17-22 per cent (even higher in some cases) cess. These vehicles now attract 40 per cent GST. The new reforms are set to come into action from September 22, and several manufacturers have announced model-wise benefits that consumers would enjoy.

Thanking the government's move, Maruti Suzuki India executive director Rahul Bharti said, "It's our time to respond. There is absolutely no doubt that a single paisa should be retained by the manufacturer. It's a gift from the government to consumers of India."

Maruti Suzuki expects a positive swing in the small car market that has been under continued stress for the last few years. "We know the pulse of the customer. Small cars had some structural issues. They were declining at about 6 per cent. After GST reforms, our initial projection suggests a swing from -6 to +10 per cent growth. We may be surprised positively. We are accelerating our work on new plants and investments in anticipation of more demand," Bharti added.

Buoyed by the market sentiments, Maruti Suzuki is revisiting its investment plans. "It is the industry's time to respond. We might have to increase our capital expenditure because the demand surge might come. We want to be on the right side of the consumer and start producing," Bharti said.

Finance Minister Nirmala Sitharaman appreciated Maruti Suzuki's commitment to pass tax reduction benefits to the end consumer. She said the market had been waiting for the GST Council's decision and seeing demand rising is good.