Maruti Suzuki expects the passenger vehicle market to regain a 7% compound annual growth rate by FY27, helped by GST 2.0, income tax relief and repo rate transmission. For small cars, growth could accelerate to 10%. In a media roundtable, Partho Banerjee, senior executive officer (marketing & sales), spoke about the opportunities and challenges ahead. Excerpts:
Q What is the impact of GST 2.0 on the industry?
The net benefit in terms of price reduction will be around 3.5% on big cars and 8.5% on small cars. We expect the industry’s long-term CAGR to return to 7% by FY27. For small cars, growth could touch 10%.
Q What other factors will drive this growth?
Two more things — income tax relief and repo rate transmission. So far, not all finance companies have passed on lower rates, but we expect that from October. With tax benefits, GST-led price cuts, and cheaper EMIs, demand should strengthen. We expect two-wheeler users to move to cars, therefore we will see more first-time buyers coming forward.
Q How has the response been so far?
Inquiries have already risen 15%. The car penetration in the country is just 34 per 1,000 people, compared to 600–800 in developed markets. Even if penetration rises to 44, industry sales need to reach six million units, up from 4.4 million last year. The headroom is huge.
Q How are you handling production and dispatches post-GST?
We are not pushing inventory. Dispatches are only against dealer requests.
Q What about bookings of the newly launched Victoris?
We are getting around 1,000 bookings daily.
Q When will Maruti launch its EV?
Within this financial year. But we are not just launching a product, we are building an ecosystem. The three challenges we are addressing are public charging, home charging permissions, and after-sales service.