Helped by GST move, PV sales growth may rebound to 7% by FY27: Maruti

Maruti Suzuki sees passenger vehicle growth returning to 7% CAGR by FY27, with small car sales projected to rise 10% as GST cuts, tax relief and lower EMIs boost demand

The country’s largest carmaker Maruti Suzuki India expects auto sales to bounce back to the glory days of 7 per cent growth by financial year 2026-27, helped by the proposed GST rate cut which is expected to bring down car prices by 3.5 to 8.5 per cent.

 

The small car segment, where Maruti is the leader, is estimated to grow by around 10 per cent. 

 

Long-term compound annual growth rate (CAGR) of the auto industry, historically around 7 per cent, was likely to be restored from 2026-27, said Partho Banerjee, senior executive officer, marketing and sales, Maruti Suzuki.

 

He was speaking on the sidelines of the annual convention of Society of Indian Automobile Manufacturers (Siam).

 

Banerjee did not wish to comment on the immediate impact of the GST cut on sales in the second half of the year, but said that they have seen a jump in inquiries by 15 per cent since August 15 when Prime Minister Narendra Modi indicated towards GST rate rationalisation.

 

Banerjee’s optimism stems from the fact the GST cut is resulting in a 3.5 to 8.5 per cent price reduction across their range from small cars to larger ones.

 

“India’s car penetration stands at 34 cars per 1,000 people, compared to 700-800 cars per thousand people in developed countries. If the penetration moves up to 44 per 1,000 as well, there is huge room for growth,” he told reporters here.

 

On top of that, the income tax relief (for individuals earning up to ₹12 lakh) and transmission of repo rate cuts by the central bank are expected to increase disposable income and bring down the EMIs.

 

These would act as tailwinds for the sector, according to Maruti, which expects two-wheeler owners to upgrade to their first cars.

 

Small car sales have been under duress of late. Between April and August the segment has seen a 6 per cent decline in sales.

 

Maruti is not dispatching many vehicles now given in-voicing at old GST rates is difficult.

 

“We are dispatching only whenever there is a dealer request. We have around 45-days channel stock, and typically transit time for shipping vehicles is around 7-10 days,” he said.