Industry leaders gathered at the 65th SIAM annual conference, focusing on the implications of the recent GST rate reductions. The tax cuts placed passenger vehicles and two-wheelers below 350cc in the 18% tax bracket.
Vehicle prices have decreased as a result, bringing savings to consumers purchasing small cars and compact SUVs. Hyundai Motor India reported a 13% price reduction in the small SUV segment, while Maruti Suzuki is optimistic about double-digit growth in the small car market.
Despite the positive impact of the GST changes, the compensation cess presents a challenge. FADA has expressed concerns about potential issues with dealers’ e-credit ledgers. This could result in financial pressure on dealers and OEMs during the festive season. While the government is working on a solution, losses during the Navratri sales could reach ₹2,500-₹4,000 crore.
The industry is also discussing E20 fuel, with online discussions centered on possible impacts on fuel efficiency and engine performance. Union Minister Nitin Gadkari has addressed these concerns, labeling them as propaganda from the petrol lobby.
Electric vehicle adoption faces significant challenges in India. Even after providing over ₹40,000 crore in subsidies and incentives, EVs account for only 7.6% of total vehicle sales. The nation’s target is 30% by 2030.