High GST, acquisition cost slowing down car demand, says MSI chairman

Production and sales again dropped and the recovery that had started in the previous quarter suffered a set-back.

High cost of acquisition due to a variety of reasons, including higher GST than all other major countries, is slowing down car demand in the country and unless the Centre and States take steps to reduce it, the industry is unlikely to experience reasonable growth, according to Maruti Suzuki India Chairman R. C. Bhargava. Addressing shareholders in the company’s Annual Report for 2020-21, he said after the devastating second wave of the coronavirus pandemic hitting the first quarter of FY22, the performance in the next three quarters will largely depend on how effectively people get vaccinated and observe safety protocols. “In March 2021, we were quite optimistic about the outlook for FY2021-22. The suddenness and ferocity of the second wave of the pandemic was a surprise to all, and led to lockdowns and restrictions in most parts of the country,” he wrote.