GST Cut Fuels Registration of Nearly 10,000 New Vehicles in Chandigarh

GST Cut Fuels Registration of Nearly 10,000 New Vehicles in Chandigarh

Issue: To analyze the surge in new vehicle sales and registrations in Chandigarh during the September-October festive period, and to confirm the role of the recent Goods and Services Tax (GST) rate reduction as the primary economic catalyst.

Facts:

• The GST cut on automobiles and two-wheelers was implemented ahead of the festive season (which began with Navratri on September 22).
• The period analyzed spanned from the first day of Navratri (September 22) till the end of October.
• A total of 9,642 new vehicles (both two- and four-wheelers) were registered during this period.
• This represents a significant year-on-year increase compared to the 7,862 vehicles added during the same festive season period last year.
• A Royal Enfield dealer reported sales were up 115% year-on-year during the festival season.

Decision:

The GST rate cut was the primary reason for the significant spurt in vehicle sales and the addition of nearly 10,000 new vehicles during the festive season in Chandigarh.

Key TakeDowns:

• Affordability Drives Sales: The price reduction, enabled by the GST cut, successfully encouraged consumers to buy vehicles, confirming the effectiveness of the tax stimulus.
• Highest Post-COVID Sales: Dealers reported that the sales figures represented the highest sales witnessed since the COVID-19 pandemic began, showcasing the market’s strong rebound.
• Job Creation: The surge in demand has led dealerships to increase their staff to keep up with the demand, helping to create more jobs in the sector.
• Post-COVID Trend Continues: The post-COVID trend of residents prioritizing four-wheelers over two-wheelers (driven by the preference for private space) continued, with four-wheeler registrations overtaking two-wheeler registrations in recent years.