‘Price brackets of small SUVs are similar to the hatchbacks now’

Hyundai Motor India (HMIL) on Thursday said that the recent cut in the GST rates on small cars may not generate much traction to small hatchbacks, but instead it would be very good for the sub-four metre SUVs like Exter or Venue or even Tata Punch because customer preference has now changed to small SUVs rather than small hatchbacks.

Speaking to mediapersons on the sidelines of the 65th Society of Indian Automobile Manufacturers (SIAM) annual convention, Tarun Garg, Whole-Time Director and Chief Operating Officer, HMIL said as the price brackets of small SUVs are similar to the hatchbacks now, after GST 2.0, sales will continue to grow for such vehicles instead of small cars like Maruti Suzuki Alto, WagonR, Swift or even Hyundai’s i10 Nios or i20.

Customer benefits

“In SUVs in the less than ₹10 lakh space, the customer benefits the most… so, most of the manufacturers are launching products there only (compact SUV). Tell me how many new hatchbacks/nameplates have been launched in the last five years… so the growth will also come from where the new products come,” he explained.

He said it does not mean that GST rate has come down suddenly so aspirations would die. For instance, “somebody who could pay ₹10 lakh yesterday, will still be able to pay ₹10 lakh today, but he could get a car A, now he can get A+ Delta,” he said.

However, country’s top carmaker Maruti Suzuki India (MSIL), which has the maximum number of small cars, said it was expecting that the segment should grow at 10 per cent.

“A combination of factors, including income tax relief on annual income of up to ₹12 lakh, transmission of the impact of repo rate cuts by RBI on the ground making EMIs lesser, besides the GST rate reduction, will help in making small cars more affordable thereby encouraging two-wheeler riders to upgrade,” Partho Banerjee, Senior Executive Officer, Marketing and Sales, MSIL, said.

Domestic passenger vehicle (PV) sales have slowed down in the past couple of years, specially in the small car segment due to affordability issues. As per industry estimates, in the April-August period this fiscal, PV sales were at around 17.05 lakh units as compared to 17.31 lakh units in the year-ago period.

Published on September 11, 2025