Clarity about GST rates at the earliest to regain the sales momentum in the festive season: luxury car manufacturers

New Delhi: A clear picture with regard to new GST rates at the earliest will help the overall car industry, including the luxury car segment, to regain momentum in the current quarterly, which usually sees improved sale due to the festive season.

The powerful GST Council, chaired by Minister of Finance Nirmala Sitharaman, will meet on 3-4 September to discuss that moving to a load of two bibs.

In an interaction with PTI, BMW Group India President and CEO Hardep Singh Brar said that recent speculation about the change in GST rates has caused uncertainty in the heads of consumers.

The interest and question of consumers is strong, but they (potential buyers) have chosen a wait -and -see approach, and this delayed decision -making affects the sale of new vehicles at a certain level, he noticed.

“Accelerating clarity about GST rates is essential to come quickly again and to ensure that the contribution of the automotive sector to economic growth in this quarter is robust,” Brar explained.

He also hoped that the sustainable push to electric cars will be encouraged as a priority and will reflect in the GST strategy by retaining the existing 5 percent GST on all electric vehicles of the passengers. A negative impact of GST rates can derail the vision of high electrical acceptance and local production in India, he added. Brar noted that the company is aimed at introducing various model finishes during the festival season.

Audi India -Head Balbir Singh Dhillon stated that the luxury car manufacturer is going into the party season with a steady momentum and a positive view.

“After the GST clarification that is expected in the first week of September, we expect that consumer trust will grow and asks to increase our range – especially for our SUVs, who continue to attract customers,” he noticed.

With an exciting product portfolio and strong customer involvement, the automaker has faith in persistent growth during this festival period, Dhillon said.

Mercedes-Benz India MD & CEO Santosh Iyer said that the festive seasonal is expected by customers for a long time and that the company will roll out an integrated campaign next week, which tackles customers’ ambitions.

“We expect that this festive season will produce a boost and deliver the sales strength, because this is the right time, because of a positive customer sentiment and a refreshing new portfolio that is being offered,” he added.

In a commentary on the general business scenario in the luxury car segment, Icra Senior Vice President & Group Head, Corporate Ratings Jitin Makkar said that sales during the festive season this year are expected to grow only in the mid-single figures, because trade winds that come from high American rates will probably be steams.

Between FY22 and FY25, the luxury car segment exceeded the wider market for passenger vehicles, driven by a strong ambitious demand for various demography, including younger and first buyers, he added.

“However, this trend is ready to turn in FY26. A potential GST speed reduction on smaller cars can stimulate the demand in the mass market regulation, while the luxury segment can get a more modest environment,” said Makkar.

In the first half of CY2025, the growth of luxury car sales is already lukewarm, underweight by geopolitical tensions and volatility of the stock market, he said.

“Although buying the festive season can successfully levy, the total growth for the full year will probably be filled in,” he added.

The festive season usually starts with Onam and ends every year at Diwali.