GST rate cut to inject fresh growth momentum into auto sector: Siam

The recent reduction in GST rates on automobiles will inject fresh growth momentum into the Indian automotive sector, make vehicles more affordable and enable broader access to personal mobility, industry body Siam said on Thursday.

Addressing the annual convention of the auto industry body, Society of Indian Automobile Manufacturers (Siam) President Shailesh Chandra also welcomed the government's move to "suitably amend some of the procedural issues which would greatly help in supporting the ease of doing business".

"The automobile industry is immensely grateful to the government of India for the recent landmark decision to reduce GST rates on vehicles, which will bring renewed cheers to consumers and inject fresh growth momentum into the Indian automotive sector," Chandra said.

He further said, "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 noted that in the last fiscal year, the Indian auto industry continued its steady performance across domestic markets as well as exports, with passenger vehicles recording" the highest-ever sales of 4.3 million units, with a growth of 2 per cent over the previous year.

Exports from this category also achieved their highest-ever levels at 7.7 lakh units, registering a robust 14.6 per cent increase year-on-year.

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".

Chandra also thanked the government for "suitably amending some of the procedural issues which would greatly help in supporting the ease of doing business".