# First-time car buyers surge as GST cut boosts small vehicle demand

> Lower GST rates spark first-time buyer surge in India's small vehicle market
- Title: First-time car buyers surge as GST cut boosts small vehicle…
- Summary: Lower GST rates spark first-time buyer surge in India's small vehicle market First-time car buyers now account for 54% of Maruti Suzuki sales after GST 2.0…
- Keywords: maruti suzuki, tata motors, gst 2.0, first-time buyers, small vehicles, india, suv market, alto, wagonr, punch, First-time, car
- Source: The Economic Times — https://economictimes.indiatimes.com/industry/auto/auto-news/first-time-car-buyers-make-a-comeback-as-lower-gst-boosts-small-vehicle-demand/articleshow/134397176.cms
- Author: Sharmistha Mukherjee
- Published: 2026-09-22T00:00:00+00:00
- Read time: 1 min
- Topics: maruti suzuki, tata motors, gst 2.0, first-time buyers, small vehicles, india, suv market, alto, wagonr, punch
## First-time buyers return
First-time car buyers now make up 54% of Maruti Suzuki sales in April-August, up from 42% a year earlier

> GST 2.0 has enabled the return of the first-time car buyers, broadening the base of the market
## GST 2.0 tax cut
Government reduced GST on small vehicles less than 4 meters long from 28% to 18% to boost affordability
## SUV demand surges
SUV sales grew 67% year-on-year after GST cut, with models like Nexon and Punch leading growth

> Since GST 2.0, the SUV segment has recorded the strongest growth, expanding by 67 percent
## Entry-level SUV growth
Mahindra's entry-level SUV sales rose 20% year-on-year in first five months of fiscal, up from 5% growth in previous year
## Market expansion
Overall vehicle sales in the 18% GST category grew 29% to 1.24 million units in April-August
## Key takeaway

First-time car buyers now account for 54% of Maruti Suzuki sales after GST 2.0 reduced taxes on small vehicles