New Delhi, Sept. 5 -- Research firm Kotak Institutional Equities has in a sector report noted that the Goods and Services Tax (GST) Council's decision on rate rationalisation for automobiles and components, has been "broadly in line with expectations", with rates for most segments unified at 18 per cent, and 40 per cent for larger passenger vehicles and two-wheelers over 350 cc.

It further added that assuming a full pass through of the rate reduction to customers from auto makers, it expects on-road prices of passenger vehicles to reduce between 2-9 per cent across most segments, increase by 6-7 per cent for 350cc two-wheelers, and remain unchanged for electric vehicles.

"Lower prices should stimulate demand recovery across segments, pa...