September 15, 2025

India’s recent GST cut on smaller vehicles is shaking up the car market, and guess who’s taking the spotlight? Micro SUVs! These nifty cars, such as Tata Punch and Maruti Fronx, are getting a golden chance to shine thanks to the government cutting GST from 28% to 18% on small cars. This tax cut applies to cars under four meters long with petrol engines below 1200cc and diesel under 1500cc. The usual mini cars like Maruti’s Alto and Celerio, Renault’s Kwid, and Hyundai’s Nios are in this category, as well as sedans like Maruti’s Dzire and Honda’s Amaze. But here’s the twist: industry experts believe it’s the micro SUVs — not just the tiny hatchbacks — that will benefit the most. Why? Because SUVs have that attractive charm with higher ground clearance, stronger body styles, and cool features that buyers crave. Tarun Garg, COO of Hyundai India, told the Times of India, “People want SUV styling, higher ground clearance, and features like sunroof and six airbags. The new smaller SUVs look good, they have better features, and come nearly at the same price as that of hatchbacks. So they will be the winners.” The numbers back this up! Hatchbacks’ share in total car sales dropped from 50% in 2015 to just 22% in 2025. Meanwhile, SUVs exploded from 13.5% to a whopping 54%! From small SUVs like Tata Punch and Maruti Fronx to big names like Hyundai’s Creta, Mahindra’s XUV700 and Thar, even luxury SUVs from BMW and Mercedes-Benz, the SUV craze is everywhere. Still, Maruti Suzuki isn’t ready to give up on hatchbacks and mini cars. Partho Banerjee, senior executive officer (marketing & sales) at Maruti, said, “We believe that against a decline of 6%, the mini and hatchback segment cars will grow by 10% after the GST cuts.” So, brace yourselves! The battle between hatchbacks and micro SUVs just got spicier with this GST twist, making the roads a cooler place to watch!

Read More at Economictimes →

Tags: Gst cut, Micro suvs, Tata punch, Maruti fronx, Car sales, Small vehicles,