AHMEDABAD: Vehicle sales in Gujarat are revving up, with SUVs and luxury cars driving the surge, especially in rural areas. A 43% spike was recorded in high-end car sales between 2022-23 and 2023-24, with SUVs leading the charge. Transport department data reveals the most significant jump of 47% in vehicles priced between Rs20 to Rs 50 lakh, while cars above Rs 50 lakh saw a 39% increase.
Interestingly, the demand for cars in the Rs 20 lakh range grew by 10%. Of every 100 cars sold in the Rs 20-50 lakh category, only 40% were sold in the cities of Ahmedabad, Surat, Vadodara and Rajkot. The remaining 60% were purchased in rural areas, a shift attributed to rising incomes and better liquidity among farmers.
Dealers report a growing preference for SUVs in rural areas, driven by farmers' increased earnings. The numbers tell the story: in 2022-23, 7,024 vehicles priced above Rs 20 lakh were sold, jumping to 10,347 in 2023-24 - a rise of 3,323 units. Between April 1 to July 31 this year, the number touched 1,536.
RTO officials said urban residents are also registering luxury vehicles in rural areas to save on vehicle tax. For instance, registering an SUV worth Rs 40 lakh in a rural area can save up to Rs 1.75 lakh in taxes compared to urban centres like Ahmedabad.
Vehicle taxes in Gujarat vary significantly based on location, ranging from 1% to 5% of the vehicle's base price. Ahmedabad Municipal Corporation would levy Rs 4.35 lakh in taxes for a car with a base price of Rs 87 lakh.
In contrast, the tax would be Rs 2.61 lakh in Rajkot, Rs 2.17 lakh in Vadodara, and Rs 3.
48 lakh in Surat for the exact vehicle. Fada Gujarat chairman Hitendra Nanavati attributes this trend to the liquidity in the state, with buyers willing to upgrade to SUVs over Rs 20 lakh. "Limited options in the Rs 30-50 lakh range push buyers toward higher-end models which are over Rs 50 lakh," he said.
Pranav Shah, former Fada Gujarat chairman, highlighted that easy financing and a lower rejection rate also fuel the SUV boom. "Buying high-end cars was the privilege of the business class once. Even corporate managers and executives are purchasing SUVs and other high-end cars.
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