GST cuts spark SUV sales boom; small cars struggle

The trend comes amid an intensifying tussle over emission norms for small cars

- Ayaan Kartik

Mini cars grew just 3% on-year to 22,415 units, versus a 17% growth to 2,07,180 units for compact SUVs of less than 4 metre length.

(PTI)

Hopes that a landmark cut in federal taxes would provide a lifeline to struggling small cars like Maruti Alto, Spresso and Renault Kwid have been dashed, with latest sales data showing buyers continuing to favour bigger, more expensive vehicles.

The trends come in the backdrop of an intensifying tussle between carmakers over policy support for small cars under upcoming emission norms.

In October-November, data released on Friday by the Society of Indian Automobile Manufacturers (SIAM) showed that mini cars cumulatively grew just 3% year-on-year (yo-y) to 22,415 units, compared to 17% (to 2,07,180 units) for compact SUVs of less than 4 metre length.

To be sure, both numbers reversed declines seen in the first six months of the fiscal year (April-September), when small cars fell 34% and compact SUVs fell 6% yo-y.

The overall passenger vehicles (cars+SUVs) market, too, grew 17% to 7,54,574 units in October-November.