🚗 Car Makers Gear Up for ₹50,000+ Cr Capacity Boost as GST Cuts Slash Prices

1. GST & Cess Cuts to Drive Car Sales

• Passenger vehicles (cars + SUVs) are set to become cheaper after GST 2.0 reforms.

• GST on small SUVs (sub-4m, specified engines) cut from 28% → 18% (no cess) effective Sept 22, 2025.

• Tax changes + higher tax-free income limit = higher affordability for middle-class buyers.

2. Industry Growth Outlook

• FY25: Passenger Vehicle (PV) industry volumes at 5.07 million units (domestic + exports).

• FY26 forecast: Expected 5% growth → 4.5 million units sold, reversing the 2.4% YoY decline in first 5 months of FY26.

• Demand recovery post-cyclical slowdown (FY25) + GST cuts to fuel the rebound.

3. Capacity Utilisation Status

• Current installed capacity: 6.4–6.6 million units/year.

• FY25 utilisation: ~80%.

• Mahindra & Mahindra (M&M) notes overall industry running at ~70% capacity, but leaders warn capacity needs relook if demand surges.

4. Fresh Capacity Additions (₹50,000+ Cr Industry Capex till 2029)

• Industry-wide pipeline: 1.33 million units additional capacity by 2029.

• Companies are preparing multi-crore investments to meet new demand:

  • M&M: Adding 240,000 units over next 24–30 months; planning Nu.IQ platform SUVs (from 2027) in the sub-4m segment (controls 60% of PV sales).

  • Hyundai: Expanding capacity from 824,000 → 1.07 million units/year; new plant in Pune to support.

  • Ashok Leyland: Says industry must prepare to advance investments; company itself is secure for next 2 years at current capacity.

5. Demand Catalysts

• Post-Covid surge followed by FY25 slowdown now being corrected by:

  • GST rate cuts.

  • Higher disposable incomes (due to higher tax-free income slab).

  • SUV boom (especially sub-4m SUVs with lower GST).

6. Strategic Insights for Auto Investors & Industry Watchers

• M&M & Hyundai leading the capacity race with clear expansion numbers.

• 80%+ plant utilisation = trigger point for new investments.

• With GST cuts, PV affordability may jump by 10–15%, boosting demand.

• Sub-4m SUV space (~60% market share) will be the biggest growth driver.

🔥 Bottom Line: With GST 2.0, India’s carmakers are prepping for a capacity boom worth over ₹50,000 crore, targeting 6.7–7 million annual output by 2029. Investors and suppliers should watch out for M&M’s Nu.IQ SUVs (2027) and Hyundai’s Pune facility as the next big growth triggers.

Perfect! Here’s a company-wise comparison table with current vs planned capacity, plus investment implications. This will make the article even more SEO-rich, easy to read, and attractive for investors & auto enthusiasts.

🚗 India’s Auto Giants Race for Capacity Expansion Post-GST Cuts

📊 Company-Wise Capacity Expansion Plans (FY25–2029)

🚀 Key Financial & Market Insights

1. Industry Demand Push

   • FY26 sales projected at 4.5 million units, up 5% YoY.

   • GST cuts + higher tax-free income slab = affordability boost.

2. Capex Cycle

   • Industry preparing ₹50,000+ crore investments till 2029.

   • Capacity to rise by 20% from 6.6m → ~7m units.

3. Utilisation Pressure

   • Current utilisation: ~80%, near investment trigger levels.

   • M&M already running north of 80%, Hyundai at 85%.

4. Segment Focus

   • Sub-4m SUVs: >60% of PV market.

   • GST cut from 28% → 18% (no cess) will make this the fastest growing category.

🔥 Investor Angle:

• Watch M&M’s 240k capacity bump and Nu.IQ SUV line-up (from 2027).

• Hyundai’s Pune plant marks one of the biggest foreign auto bets post-GST reform.

• Suppliers (auto parts, EV components) will see spillover demand from ~1.33m unit expansion.