Marking the one-year anniversary of the GST 2.0 tax rationalisation, car market leader Maruti Suzuki India announced plans to accelerate its capital expenditure (capex) to meet rising passenger vehicle demand. MD and CEO Hisashi Takeuchi highlighted that the company’s passenger vehicle sales grew nearly 36% year-on-year during April–August 2026, boosted by an impressive 96% surge in the entry-level segment, where reduced costs made mobility far more accessible. Effective September 22, 2025, the GST Council lowered tax rates from 28% to 18% for small petrol, LPG, CNG, and diesel vehicles meeting specific engine and size criteria. Mirroring Maruti’s sentiment, Federation of Automobile Dealers Association (FADA) President Sai Giridhar reported that Indian auto retail registered over 3 crore vehicles between October 2025 and August 2026—a nearly 20% year-on-year growth compared to under 5% prior to the tax cuts. By permanently lowering on-road costs for small cars, two-wheelers, tractors, and commercial vehicles, the tax reform brought first-time and long-deferred buyers into showrooms, driving rural growth ahead of urban markets and pushing two-wheeler sales back to peak 2018 levels. Encouraged by this increased domestic scale and competitiveness, Maruti Suzuki’s accelerated capex aims to keep pace with demand while creating a broad multiplier effect across the national economy.
Maruti Suzuki Sees Entry Segment Jump 96% After Tax Cut
