By Shally Mohile
Copyright indiatimes
After the lull of Shraadh-typically marked by muted footfalls and weak sales-auto retailers are pinning hopes on the festive season that begins Monday with Navratri. While such seasonal swings are familiar, this year is unusual. The government’s sweeping tax cuts under GST 2.0, announced more than two weeks before its implementation on Monday, coincided with the Shraadh fortnight, bringing sales to a near standstill as potential buyers waited for the new tax rates to take effect and the inauspicious period to end.About 15% of annual auto industry sales are generated during the 42-day festive period, spanning Navratri to 15 days past Dhanteras (which includes Bhai Dooj). This makes the current weeks critical for dealers looking to recover lost momentum. Dealership checks in Mumbai’s central-eastern suburbs just two days before GST 2.0 took effect, underscored the slowdown. At a Tata Motors showroom, three of five customer-engagement tables were occupied, and families walked in steadily, but few were ready to close deals.”Enquiries are up 10-12% year-on-year as well as month-on-month, but no one is buying,” said the general manager, who pegged losses on models such as the Safari and Harrier at ₹40-₹45 lakh in the past three weeks. He expects to recover the shortfall during the festive rush.A Hyundai dealership showed a nearby similar picture-brisk enquiries, token bookings, but no closures. The sales head said they were clearing existing stock of high-cess models like the Creta at revised prices ahead of GST 2.0, even if it meant a margin hit. Dealers said offers and freebies helped move the needle slightly, with several companies, especially those exposed to higher compensation cess, choosing to sell at post-GST prices before the official rollout while offering attractive benefits.Retailers now enter the crucial festive phase with elevated inventory levels: around 50-52 days at passenger vehicle outlets and 65-70 days at two-wheeler dealerships, where sales have been particularly sluggish. The slow movement of stock is compounded by the upcoming integration of the compensation cess into GST rates from September 22. Dealers fear that existing cess credits will become unusable, adding to working capital pressures just as festive demand ramps up.Live EventsThe FADA has flagged the potential loss at about ₹2,500 crore and urged the government to allow transfer of these unused credits to regular CGST/IGST ledgers to prevent significant financial strain.Add as a Reliable and Trusted News Source Add Now!
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Read More News onGST 2.0 impact on automotive industryfestive season auto salesrecovery of auto sales after Shraadhauto industry tax cutsauto dealerships inventory levelsHyundai Tata Motors salestata motors
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(You can now subscribe to our Economic Times WhatsApp channel)Read More News onGST 2.0 impact on automotive industryfestive season auto salesrecovery of auto sales after Shraadhauto industry tax cutsauto dealerships inventory levelsHyundai Tata Motors salestata motors(Catch all the Business News, Breaking News, Budget 2025 Events and Latest News Updates on The Economic Times.) Subscribe to The Economic Times Prime and read the ET ePaper online….moreless
