India’s leading carmakers hold contrasting views on the recent GST rate cut and its impact on the passenger vehicle market. Maruti Suzuki (MSIL) said the reduced tax rate has triggered a sharp rise in hatchback bookings, while Hyundai Motor India reported that the 10% cut, from 28% to 18%, has given a significant boost to SUV sales.
“The customer had the same amount of money earlier and now. However, he can buy a bigger car now. The initial trend indicates that customers are upgrading rather than downgrading. While the Indian base is low, “two-wheelers and helmets” will continue, but still it is all about aspirations and customers are more and more wanting to upgrade,” said Tarun Garg, Whole-Time Director & COO, Hyundai Motor India Limited (HMIL), ahead of the new Venue SUV launch.
Garg’s reference to “two-wheelers and helmets” alluded to Maruti Suzuki’s recent comment that it is now tracking the number of helmets at its showrooms, citing a growing trend of two-wheeler owners aspiring to upgrade to cars.
RC Bhargava, Chairman of MSIL last week said that the perception among some carmakers that Indians no longer aspire to own small cars and that the market has shifted entirely toward larger, more premium vehicles has proven incorrect following the GST revision.
Garg, who is set to become the first Indian to lead Hyundai’s operations in India, said that there is a narrative going on about GST cuts and their impact on smaller cars.
“So what has happened this year? Between January and August, hatches used to contribute 22.4% of the total industry sales. September plus October, hatches contribution came down to 20.4%. In October 2025, it was only 20%. For SUVs, the share was 54% between January and August. In September and October, the SUVs are 56.9% and October SUVs are 57% of total sales. I think the story is very clear…buyers are aspirations and they are looking to upgrade,” he stated.
According to Garg, the compact SUV segment stands to benefit most from the GST revision and sales here are likely to breach the 1 lakh units per month milestone soon. “The previous Venue model was taxed 29% (petrol) and 31% (diesel). Under the new GST, this model is taxed at 18%. So the benefit is 11% and 13%. I believe the Venue segment has maximum potential from the GST rate cut,” he said.
On the company’s recent sales performance and its decline in the top-selling ranking list, Garg said that capacity constraints and phasing out the old Venue impacted their overall sales performance. He said that with the Pune plant becoming operational and many new launches planned, they expect a surge in volume.
"Numbers and rankings are very important but at the same time, we want to grow profitably. We have given a very strong plan to come back with the launch of new models as well as other things," Garg said. The Korean company plans to launch 26 new models in India by FY30.
Hyundai on Tuesday made the global debut of the all-new Hyundai Venue at starting prices of Rs 789, 900 (ex-showroom). Manufactured exclusively in the company’s new Pune facility, the new Venue will take on Maruti Suzuki’s Brezza and Tata Motors’ Nexon in the highly competitive compact SUV segment.
