Various models of Mercedes-Benz cars have been parked at the company’s vehicle assembly plant in Chakan in Maharashtra. File | Photo Credit: Reuters
A clear picture about the new GST rates at the earliest will help the overall auto industry including the luxury car segment to gain momentum in the ongoing quarter, usually looking at the increased sales due to the festive season.
The high-power GST Council chaired by Finance Minister Nirmala Sitarman will be met on 3-4 September to discuss two-slabs on taxation.
In a conversation with PTIBMW Group India President and CEO Hardeep Singh Brar said that recent speculation about changes in GST rates has created uncertainty in the minds of consumers.
He said that the consumer interest and demand is strong, but he (potential buyers) adopted a waiting-and-clock approach, and it is affecting the sale of the new vehicle at a certain level by making delayed decisions, he said.
Mr. Brar said, “It is necessary to accelerate clarity at GST rates and to ensure the contribution of the auto sector during this quarter.”
He also expected that permanent push towards electric cars would be encouraged as a priority and would reflect in GST strategy by maintaining the current 5% GST on all passenger electric vehicles.
He said that adverse effects from GST rates can derail the vision of high power adoption and local production in India.
Mr. Brar said that the company is ready to introduce many models trims during the festival season.
Audi India chief Balbir Singh Dhilan said that the luxury car manufacturer is entering the festive season with a stable speed and a positive attitude.
He said, “After the expected GST explanation in the first week of September, we expect consumer confidence that we demand growing and growing in our product range- especially for our SUVs, who continue to attract customers,” he said.
With an exciting product portfolio and strong customer engagement, the automeker is confident of continuous growth in the duration of this festival, said Mr. Dhillon.
Santosh Iyer, MD and CEO of Mercedes-Benz India, said that the seasonal is highly anticipated by the seasonal customers and the company will roll an integrated campaign next week, addressing the aspirations of the customers.
He said, “We hope to sell impatts and drives in this festive season as this is the right time, to refresh a new portfolio due to positive customer spirit and on the offer,” he said.
Commenting on the overall trade scenario in the luxury car segment, ICRA Senior Vice President and Group Head, Corporate Rating Jitin Makkar said that sales are expected to increase only in mid–certain digits during the festive season this year, as the business headwonds emanating from the influence of the higher American tariffs are likely to reduce the trade spirit.
Between FY22 and FY25, the luxury car segment overtook the comprehensive passenger vehicle market, inspired by strong aspirations in diverse demographics including young and buyers, including buyers.
“However, this trend is ready to reversed in FY 26. A potential GST rate cut on small cars can stimulate demand in the mass-market segment, while the luxury segment may face more adult environment,” said Mr. Capricorn.
Already, in the first half of Cy2025, the increase in sales of luxury cars has been tapped, weighed by geo -political stress and instability of the stock market, he said.
He said, “Although the volume may be procured sequentially during the festive season, overall development for the whole year is likely to remain silent,” he said.
The festive season usually begins with Onam and ends with Diwali every year.
Published – August 31, 2025 12:12 PM IST