Carmakers report strong November sales growth on GST-driven demand surge

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India's top carmakers reported robust sales growth to dealers in November on Monday, boosted by an earlier tax reduction that lowered vehicle prices and spurred demand.

Market leader Maruti Suzuki reported a 21 per cent year-on-year rise in domestic sales, driven by sport utility vehicles as well as small cars like Alto.

Rivals Mahindra & Mahindra and Tata Motors Passenger Vehicles both posted a 22 per cent sales jump, while Hyundai Motor India's sales grew 4.3 per cent.

These companies account for more than 80 per cent of total car sales in Asia's third-largest economy.

India in late September cut the goods and services tax on SUVs with engine capacities of more than 1500 cc to 40 per cent from about 50 per cent and on small cars to 18 per cent from 28 per cent in a bid to spur consumer spending and bolster growth amid steep U.S. tariffs.

Three out of the four top carmakers had also seen a rise in sales in October.

Consumers upgrading to premium models have also helped overall demand, analysts say.

Maruti's small car segment, its biggest, saw sales rise 18.9 per cent in November, while its utility vehicle sales rose 22.9 per cent.

In fact, automakers are finding it difficult to keep up with demand that stays buoyant after the end of the month-long festive season.

"We are not able to increase the production as per the market requirement. Our production team is working on Sundays, on holidays to ensure that we are able to meet the requirement," Partho Banerjee, Maruti's head of marketing and sales, told reporters.