GST 2.0 to aid passenger vehicle sales surge 2-3% in FY26, two-wheelers could grow 5-6%: Crisil

Share via: Crisil Ratings projects the Indian PV market to grow 2-3% in FY26, while two-wheelers to post 5-6% growth. Crisil Ratings projects the Indian PV market to grow 2-3% in FY26, while two-wheelers are expected to post 5-6% growth. (HT_PRINT) View Personalised Offers on Check Offers Passenger vehicle sales in India could grow by up to three per cent in the current financial year. Also, the two-wheeler segment could see a growth between five and six per cent in FY26. This growth would be bolstered by the government’s decision to rationalise the tax structure under the GST 2.0 regime, which is slated to be effective from September 22. The GST Council approved the proposal of reducing tax under the GST 2.0 earlier this month, which resulted in the total tax incidence on passenger vehicles being reduced across segments from September 22. Following this move, several automakers, including Tata Motors, Hyundai, Toyota, Renault, Kia, MG, Nissan, Mahindra, Mercedes-Benz, Mini, Lexus, Audi, TVS, Jawa, and Yezdi Motorcycles, have announced price cuts across their respective vehicle range. These price reductions are expected to boost demand and sales of the passenger vehicles and sub-350 cc category two-wheelers during this festive season, eventually bolstering the total sales in this fiscal. Forecasting the growth for the Indian passenger vehicle and two-wheeler market, Crisil Ratings has stated that the GST Council’s decision to move to a two-slab tax structure of five per cent and 18 per cent, effective from September 22, is a timely move that will revive demand for automobiles. It also projected that with the GST cut fully passed on, vehicle prices are expected to drop five to 10 per cent, which will translate to a price reduction between ₹30,000 and ₹60,000 for small passenger vehicles, while the two-wheelers would see price cuts between ₹3,000 and ₹7,000. Crisil Ratings Senior Director Anuj Sethi said that with the rate cut coinciding with the Navratri and the festive season, sentiment would get a timely boost. “Coupled with new launches, softer interest rates and improved affordability, this should drive a stronger second half for the automobile sector,” Sethi said. According to the ratings agency, two-wheelers and passenger vehicles (PVs), which together account for 90 per cent of the domestic automobile industry’s volume, are expected to see demand increase around 200 basis points (bps) and about 100 bps, respectively. Incidentally, in the April-August period of FY26, passenger vehicle sales in India declined in the range of three to four per cent, while two-wheeler volume growth was almost flat at around zero to one per cent. Get insights into Upcoming Cars In India, Electric Vehicles, Upcoming Bikes in India and cutting-edge technology transforming the automotive landscape. First Published Date: 09 Sept 2025, 07:49 am IST
Source: hindustantimes.com