Maruti Suzuki is witnessing a surge in demand during the current festive season, with car bookings across the country rising sharply. The automaker reports that bookings in Tier 2 and Tier 3 cities have doubled, driven largely by a recent government decision to cut taxes on small cars.
Under the revised tax regime, small cars (defined as vehicles under 4 metres in length) now attract a reduced Goods & Services Tax (GST) rate of 18%, down from an earlier effective rate of 29–31% (which combined base GST and compensation cess). Industry estimates suggest this cut translates to a net benefit of 8.5%–9.9% for buyers. Together with other festive offers and promotional schemes, retail price advantages have climbed to 12%–15%, compared with typical discounts of 5%–7%.
Maruti’s Senior Executive Officer (Marketing & Sales), Partho Banerjee, said the uptick isn’t limited to metros—it’s the hinterlands that are posting standout growth. “Bookings in Tier 2 & 3 cities have doubled, and we’re seeing strong demand for small cars in these markets,” he noted.
In the first four days of the Navratri festival, total bookings for Maruti across India jumped 35%, while the small-car segment outpaced that with growth of 50%. The company said it recorded 75,000 vehicles retailed through most of a day, with the figure expected to touch 80,000 units by day’s end. Daily booking volumes have reportedly climbed from around 10,000 units before the tax cut to approximately 18,000 units now. Customer enquiries have doubled as well, from 40,000–45,000 to about 80,000 per day.
Tax reduction on larger cars (over 4 metres) has been more modest: the rate has been adjusted to 40%, down a few points from previous rates of 43–50%. But the dramatic shift for small cars appears to be fueling much of the current momentum.
Maruti’s strong festive performance comes at an opportune moment, as the industry expects a flurry of purchases before the year end. The combination of tax relief and festive sentiment is proving potent in triggering demand. Whether other manufacturers will replicate or capitalize on this stimulus remains to be seen.
As the sale season continues, automakers will closely watch whether this surge sustains and how supply chains, production targets, and customer delivery timelines hold up under pressure.
