Too Early to Say if Rise in Small Car Demand After GST Cuts Will Sustain: CEAT MD & CEO

Overall consumer trend still is towards buying SUVs and it is too early to say if the rise in demand for small car witnessed by automobile manufacturers in GST 2.0 era will be sustained, according to tyre maker CEAT Ltd MD and CEO Arnab Banerjee.

The company is maintaining its guidance for a double digit growth for the ongoing fiscal although GST 2.0 has provided an impetus, and it is looking to tap rural markets, specially for farm and two-wheeler tyres, Banerjee told PTI.

"It is too early to say... Overall consumer trend still is towards buying SUVs," Banerjee said when asked about the continuation of the impact of GST 2.0 in the passenger cars segment, specially rise in small car demand.

In the last few years, SUV sales have driven passenger cars segment and small cars sales have declined due to affordability issues. In 2025, SUVs continued strong traction going up to 55.8% of total PVs sold in India from 53.8% in 2024, even as small cars showed signs of recovery in GST 2.0 era.

Passenger vehicle wholesales in India stood at 44,89,717 units in 2025, up 5 per cent from 42,74,793 units in 2024, as per SIAM data.

"We have to wait for another quarter to see if the structural change that the OEMs are witnessing will be reversed, (if so) then numbers will be higher for smaller size tyre again," Banerjee noted.

When asked about outlook for the fiscal post GST rate cuts, Banerjee said, "We have been giving a guideline that we will grow by double digit right... the growth momentum will be sustained." He further said, "In the replacement market, with our reach in rural markets, we should be able to tap into the demand for farm and two-wheeler that will sustain. In the next quarter, we will enter March, which is the summer season, and March to June is usually a high season for us." Moreover, he said the commercial vehicle tyre segment is doing well.

On international business, Banerjee said while "the US market is always touch and go", the company has had "good traction in some of the other markets", including Europe and South East Asia.

In the US, the company's network is developing well, he said, adding, "as soon as things stabilise in the US that growth can be tapped into as well".