Car prices are set to decline as companies respond to the government’s tax reductions. According to industry analysts, a wide range of vehicles, from the Maruti Suzuki Alto to the high-end Mercedes-Benz S-Class, could see price drops ranging from ₹45,000 to a substantial ₹10 lakhs. The new pricing structure is scheduled to be implemented on September 22, potentially resulting in reductions of ₹45,000 to ₹1 lakh for smaller vehicles.
The Maruti Suzuki Alto, recognized as the industry’s most accessible entry-level car, currently has a showroom price of ₹4.23 lakhs. Luxury car manufacturers, such as Mercedes-Benz, are anticipated to reduce prices across their model lines, encompassing the A-Class and the flagship S-Class, with potential savings between ₹2 lakhs and ₹10 lakhs.
The Goods and Services Tax (GST) Council has recently overhauled the GST framework, discontinuing the 28% and 12% slabs. It authorized the streamlining of slabs to 5% and 18%. Small cars have been categorized under the 18% slab, previously subject to 28% GST plus a 1% cess. This adjustment will result in an overall tax reduction of 11% for smaller cars. The revised pricing will take effect from September 22, coinciding with the commencement of Navratri. SUVs and luxury cars will be assessed at a 40% GST rate. The former tax rate, inclusive of cess, ranged from 40% to 40%.
Audi India revealed in a statement that prices are expected to fall between 4% and 6% following the implementation of the new GST rates on September 22. The final pricing details are forthcoming. Likewise, the prices for the BMW Group India portfolio, from the X1 to X7 series, are projected to decrease by ₹2 lakhs to ₹9 lakhs. Other automakers, including Tata Motors, Mahindra & Mahindra, Toyota Kirloskar Motor, and Renault India, have already declared price reductions.