Luxury carmakers urge clarity on GST rates to boost festive season sales

A clear picture regarding new GST rates at the earliest will help the overall auto industry, including the luxury car segment, to regain momentum in the ongoing quarter, which generally sees enhanced sales on account of the festive season.The high-powered GST Council, chaired by Finance Minister Nirmala Sitharaman, will meet on September 3-4 to discuss moving to a two-slab taxation.In an interaction with PTI, BMW Group India President and CEO Hardeep Singh Brar said the recent speculation about the change in GST rates has caused uncertainty in the minds of consumers.Consumer interest and demand is strong, but they (prospective buyers) have adopted a wait-and-watch approach, and this delayed decision-making is impacting new vehicle sales at a certain level, he noted."Expediting clarity on GST rates is essential to get back to speed and ensure the auto sector's contribution to economic growth during this quarter is robust," Brar stated.He also hoped that the sustainable push towards electric cars will continue to be encouraged as a priority and will reflect in the GST strategy by retaining the existing 5 per cent GST on all passenger electric vehicles.

An adverse impact from GST rates can derail the vision of high electric adoption and local production in India, he added.Brar noted that the company is geared to introduce several model trims during the festival season.Audi India Head Balbir Singh Dhillon stated that the luxury carmaker is entering the festive season with steady momentum and a positive outlook."Post the GST clarification expected in the first week of September, we expect consumer confidence to grow and demand to increase across our product range -- ?particularly for our SUVs, which continue to attract customers," he noted.With an exciting product portfolio and strong customer engagement, the automaker is confident of sustained growth throughout this festival period, Dhillon said.Mercedes-Benz India MD & CEO Santosh Iyer said the festive seasonality is highly anticipated by customers and the company will roll out an integrated campaign next week, addressing customers' aspirations."We expect this festive season to bring in impetus and drive sales as this is the right time, owing to positive customer sentiment and a refreshing new portfolio on offer," he added.

Commenting on the overall business scenario in the luxury car segment, Icra Senior Vice President & Group Head, Corporate Ratings Jitin Makkar said the sales during the festive season this year is expected to grow only in the mid-single digits, as trade headwinds emanating from the impact of high US tariffs are likely to dampen business sentiment.Between FY22 and FY25, the luxury car segment outpaced the broader passenger vehicle market, driven by strong aspirational demand across diverse demographics, including younger and first-time buyers, he added."However, this trend is poised to reverse in FY26. A potential GST rate cut on smaller cars could stimulate demand in the mass-market segment, while the luxury segment may face a more subdued environment," Makkar said.Already, in the first half of CY2025, growth in luxury car sales has been tepid, weighed down by geopolitical tensions and stock market volatility, he said."Although festive season buying may lift volumes sequentially, overall growth for the full year is likely to remain muted," he added.The festive season usually commences with Onam and ends with Diwali every year.

-Business standard 01st September,2025

Household debt up, but India still lags emerging-market economies: RBI

Although household debt in India is rising, driven by increased borrowing from the financial sector, it remains lower than in other emerging-market economies (EMEs), the Reserve Bank of India (RBI) said in its Financial Stability Report. It added that non-housing retail loans, largely taken for consumption, accounted for 55 per cent of total household debt.As of December 2024, India’s household debt-to-gross domestic product ratio stood at 41.9 per cent. “...Non-housing retail loans, which are mostly used for consumption purposes, formed 54.9 per cent of total household debt as of March 2025 and 25.7 per cent of disposable income as of March 2024. Moreover, the share of these loans has been growing consistently over the years, and their growth has outpaced that of both housing loans and agriculture and business loans,” the RBI said in its report.Housing loans, by contrast, made up 29 per cent of household debt, and their growth has remained steady. However, disaggregated data sho...

External spillovers likely to hit India's financial system: RBI report

While India’s growth remains insulated from global headwinds mainly due to buoyant domestic demand, the domestic financial system could, however, be impacted by external spillovers, the Reserve Bank of India (RBI) said in its half yearly Financial Stability Report published on Monday.Furthermore, the rising global trade disputes and intensifying geopolitical hostilities could negatively impact the domestic growth outlook and reduce the demand for bank credit, which has decelerated sharply. “Moreover, it could also lead to increased risk aversion among investors and further corrections in domestic equity markets, which despite the recent correction, remain at the high end of their historical range,” the report said.It noted that there is some build-up of stress, primarily in financial markets, on account of global spillovers, which is reflected in the marginal rise in the financial system stress indicator, an indicator of the stress level in the financial system, compared to its p...

Retail inflation cools to a six-year low of 2.82% in May on moderating food prices

New Delhi: Retail inflation in India cooled to its lowest level in over six years in May, helped by a sharp moderation in food prices, according to provisional government data released Thursday.Consumer Price Index (CPI)-based inflation eased to 2.82% year-on-year, down from 3.16% in April and 4.8% in May last year, data from the Ministry of Statistics and Programme Implementation (MoSPI) showed. This marks the fourth consecutive month of sub-4% inflation, the longest such streak in at least five years.The data comes just days after the Reserve Bank of India’s (RBI) Monetary Policy Committee cut the repo rate by 50 basis points to 5.5%, its third straight cut and a cumulative reduction of 100 basis points since the easing cycle began in February. The move signals a possible pivot from inflation control to supporting growth.Food inflation came in at just 0.99% in May, down from 1.78% in April and a sharp decline from 8.69% a year ago.A Mint poll of 15 economists had projected CPI ...

CA Online

Search This Blog