Maruti Suzuki Slashes Car Prices By Up to 24% to Boost Demand
Maruti Suzuki, India's largest automaker, has announced significant price reductions across its vehicle lineup, effective until December 31. The cuts, which go beyond recent GST reductions, are aimed at stimulating demand and encouraging two-wheeler owners to upgrade to cars. Prices for entry-level models like the S-Presso and Alto K10 have been slashed by up to 24%, while popular SUVs like the Fronx and Brezza also see substantial reductions. This aggressive pricing strategy is expected to impact the entire Indian auto market.
Unpacked:
Maruti Suzuki reduced prices beyond the GST cuts to address declining small car sales due to affordability issues and encourage two-wheeler owners to upgrade to cars. The company aims to revive demand, especially in the entry-level segment, and stimulate overall market growth amid falling passenger vehicle sales.
Prices for the S-Presso have dropped by up to Rs 1.29 lakh (12.6-24%), while the Alto K10 has seen reductions of up to Rs 1.07 lakh (10.6-20%), both reflecting the combined benefit of GST cuts and additional company incentives.
The price cuts are expected to boost Maruti Suzuki’s market share and help passenger vehicle sales rebound to a 6-7% annual growth rate. However, analysts note that Maruti Suzuki’s profit margins may be impacted in the near term, and the move could pressure other automakers to respond competitively.
India’s new GST rates reduce taxes on small cars under 4 meters from 29-31% to 18%, making them more affordable. Larger cars and SUVs now attract 40% GST, down from 43-50%. This reform is part of the government’s strategy to stimulate demand and modernize the auto sector.