GST 2.0 drives two-wheeler owners to car showrooms, boosts Maruti

GST 2.0 price cuts are bringing a new set of first-time car buyers into Maruti showrooms, with small car bookings rising sharply and a focused campaign launched to ease financing

The share of small cars in Maruti Suzuki India has gone up sharply post the GST reforms, with the country’s largest carmaker witnessing a new profile of customers this festival season, who want to upgrade from two-wheelers to their first car buoyed by the recent tax cuts.

 

Post the GST reforms, the retail contribution of small cars has gone up to 20.5 per cent. It was 16.7 per cent for the April to September period, Partho Banerjee, senior executive officer, marketing & sales, Maruti Suzuki India, told reporters.

 

Bookings in the small car segment have been the highest, he said, adding that they are seeing a new profile of customers visiting their showrooms. 

“There are helmets on the tables at the dealership. We are altogether getting a new set of customers in our showrooms who are looking to upgrade from their two wheelers,” he said.

 

GST 2.0 is bringing in the right set of people to our showrooms, he said, adding that some of these people had never visited the showrooms before this.

 

“We had bookings of 25,847 units for our mini-segment cars (Alto and S-Presso) and we could retail only 15,700 units due to production constraints. Production team does forecasting based on past market off-take and it is not possible to change line capacities overnight,” Banerjee said.

 

He said that bookings in the small car segment have been significantly higher this year compared to last year. “We are trying now how we are able to quickly serve these customers,” he said.

 

Bookings for cars, which fall under the 18 per cent GST slab (less than four metres in length with engines up to 1,200 cc for petrol and 1,500 cc for diesel), have been up by 50 per cent. There has been a 20 per cent growth in bookings for larger cars, which come under the 40 per cent GST slab in contrast.

 

Upbeat from this trend, the company is launching a new focused campaign–– ‘Pragati ka Tyohar’ –– to ensure these new buyers are able to fulfil their dream, wherein the company would tie up with financiers etc. to make financing easy for them.

 

“People are looking for mobility, upgrading from a 2-wheeler to a 4-wheeler. We are trying to give a good finance scheme for these entry level buyers. Apart from tying up with financiers, we are also putting our skin in the game,” Banerjee said.

 

He feels that if one or two people in these new customer segments can buy a small car, it would spread like wildfire through their communities and encourage more people to come forward to buy. The campaign would be live during November.

 

Maurti feels that market expansion happens when people upgrade from 2-wheelers to 4-wheelers.