GST Cut Boosts India's Auto Demand, Sales Growth Expected

India's automobile industry is expected to experience significant growth following the government's recent reduction in GST rates on passenger vehicles, two-wheelers, and used vehicles. Maruti Suzuki projects a 7% growth in passenger vehicle sales from the next fiscal year, with the small car segment potentially growing by 10%, driven by factors such as income tax relief and lower EMIs. CarTrade Tech has reported a 25% surge in consumer traffic on its platforms, attributing this to increased affordability and improved consumer sentiment, which is anticipated to boost both new and used vehicle transactions during the upcoming festive season. According to the Federation of Automobile Dealers Associations (FADA), vehicle retail sales saw modest increases in August, though some buyers postponed purchases in anticipation of the GST reforms taking effect in September. Despite a temporary slowdown in conversions, dealers remain optimistic about strong growth momentum during the festive period. Additionally, economists suggest that the combined impact of income tax relief and GST reforms could boost India's GDP by 0.8-1%.