Mumbai: On Friday, auto stocks saw a strong rally after the GST Council's decision to cut tax rates on small cars and motorcycles. The BSE Auto Index rose by 1.30 percent, closing at 58,883.09 points. This surge came as the market responded positively to the new two-slab GST system — 5 percent and 18 percent — announced to take effect from September 22, the first day of Navaratri.
Hyundai Leads the Pack
Hyundai Motor India led the auto sector gains, rising 2.69 percent on the BSE. Other top performers included Eicher Motors (+2.43 percent), Mahindra & Mahindra (+2.34 percent), and Ashok Leyland (+2.22 percent).
Maruti Suzuki also climbed 1.70 percent, while TVS Motor went up 1.28 percent. Smaller gains were seen in Sona BLW (0.80 percent), Bharat Forge (0.77 percent), Tata Motors (0.63 percent), Bajaj Auto (0.22 percent), and Hero MotoCorp (0.21 percent).
GST Cuts Boost Sentiment
The reduction in GST rates from 28 percent to 18 percent on many popular vehicle categories is being seen as a major positive move. It affects petrol, LPG, and CNG vehicles with engine sizes under 1,200cc and length under 4,000 mm, and diesel vehicles under 1,500cc and 4,000 mm. Two-wheelers like motorcycles under 350cc will also now attract 18 percent GST, down from the current 28 percent.
Positive for Buyers and Industry
Experts believe the decision will benefit first-time buyers and middle-class families, especially during the upcoming festive season. According to Ajit Mishra of Religare Broking, the move is 'timely and will inject fresh momentum' into the auto sector. Industry players say this will not only boost sales but also investor confidence in automotive stocks.
