A new rift has emerged in India’s automotive sector as Hyundai Motor India and Maruti Suzuki — the country’s two largest carmakers — clash over the real beneficiaries of the government’s recent GST rate cuts.
The debate comes amid October 2025 sales figures that marked one of the strongest months ever for the Indian auto industry, with both companies posting impressive numbers but showing contrasting market trends across segments.
Diverging Views on GST Benefits
According to Hyundai, the reduction in GST rates has primarily boosted SUV and premium car sales, helping the mid-to-high-end segments thrive. The company claims this shift reflects a changing consumer preference toward larger, feature-rich vehicles that symbolize both comfort and status.
In contrast, Maruti Suzuki argues that the real benefits have not yet reached entry-level and compact car buyers, who make up a significant portion of India’s middle-class consumers. Maruti maintains that affordability remains a challenge, even after the GST cuts, due to rising raw material and compliance costs.
A senior Maruti executive stated, “While overall numbers look strong, the true test is whether first-time buyers are returning to the market. Right now, that recovery is slower than expected.”
October 2025: A Record Month with Contrasts
Industry data shows India’s passenger vehicle sales in October 2025 touched a historic high, driven by festive season demand, improved supply chains, and new model launches.
- SUVs and crossovers dominated the charts, contributing nearly 52% of total passenger car sales, led by Hyundai Creta, Tata Nexon, and Mahindra Scorpio-N.
- Small hatchbacks, traditionally Maruti’s stronghold, saw marginal growth, indicating a possible market shift toward higher-priced models.
Industry Analysts Weigh In
Analysts suggest that the GST rate revisions have indeed favored vehicles in the ₹15 lakh and above range, while the budget segment remains sensitive to financing costs and disposable income levels.
Experts also warn that if small car affordability continues to decline, India might witness a long-term slowdown in the mass-market segment — a crucial pillar for sustaining auto industry growth.
The Road Ahead
The government’s next move on GST rationalization could determine the future of India’s automotive landscape. Both Hyundai and Maruti have urged policymakers to adopt a balanced approach that encourages premium innovation without alienating entry-level buyers.
As the industry enters the final quarter of FY2025–26, all eyes will be on whether tax benefits and consumer incentives can maintain momentum across all vehicle categories — not just the premium ones.