GST rate cut: How much domestic PV sales growth Maruti Suzuki expects from FY27

Maruti Suzuki India expects domestic passenger vehicle (PV) sales growth to return to about 7% from fiscal year 2026-27 (FY27) following the recent reduction in goods and services tax (GST) on automobiles, a senior company executive said on Thursday.

The country’s largest carmaker also projects faster expansion at around 10% in the small car segment, where it has a dominant presence, Partho Banerjee, Senior Executive Officer for Marketing and Sales, told reporters on the sidelines of the annual convention of the Society of Indian Automobile Manufacturers (SIAM).

“The long-term growth CAGR, which used to be around 7% for the Indian auto industry, we feel it will go back to that again from 2026-27,” Banerjee said.

A combination of income tax relief for those earning up to ₹12 lakh annually, lower borrowing costs from repo rate cuts and GST reduction will make small cars more affordable, he added.

“We see this is a big opportunity for all the two-wheeler customers to upgrade to a four-wheeler,” Banerjee said.

Domestic PV sales have slowed over the past two years, particularly in the small car segment, due to affordability pressures.

Industry data shows sales at 17.05 lakh units in April-August of the current fiscal year, compared with 17.31 lakh units in the same period last year.

Banerjee said sales are expected to pick up in the latter half of this fiscal year following the GST cut.

SIAM President Shailesh Chandra said that the recent reduction in GST rates on automobiles will inject fresh growth momentum into the Indian automotive sector.

"Making vehicles more affordable, particularly in the entry-level segment, it will significantly benefit first-time buyers and middle-income families, enabling broader access to personal mobility," he said at the annual convention.

He also noted that the two-wheeler segment continued on its recovery path, reaching 19.6 million units and growing at 9.1 per cent, "though it is still below the earlier peak of 21 million, which was achieved in FY19".