The Indian auto industry convened for the 65th SIAM annual conference, a meeting marked by the recent GST rate cuts. The reduction brought passenger vehicles and two-wheelers (under 350cc) into the 18% tax bracket.
The GST changes are resulting in lower vehicle prices, offering relief to buyers of small cars and compact SUVs. Hyundai Motor India reported up to a 13% price reduction in the small SUV segment, while Maruti Suzuki anticipates strong growth in the small car market.
While the industry applauded the GST cuts, the compensation cess remains a point of contention. FADA raised concerns about the potential impact on dealers’ e-credit ledgers, potentially creating financial strain during the festive season. The government is seeking a solution, but losses during the Navratri sales could range from ₹2,500 to ₹4,000 crore.
Debate also surrounds E20 fuel, with social media users raising concerns about fuel efficiency and engine performance. Union Minister Nitin Gadkari refuted these concerns as orchestrated by the petrol lobby.
India’s transition to electric vehicles faces hurdles. Despite substantial government incentives exceeding ₹40,000 crore, EVs account for only 7.6% of total vehicle sales, falling short of the 30% target by 2030.