NEW DELHI: Luxury car sales are back in the fast lane and manufacturers predict volume to grow in double digits in 2017, with goods and services tax providing an unexpected boost after a promising start to the year.Sales of cars and SUVs priced between Rs 25 lakh and Rs 2 crore fell for the first time in 2016, with curbs on the sale of large diesel vehicles in and around Delhi in the first half of the year and demonetisation towards the end causing roadblocks. For 2017, industry insiders forecast sales to expand as much as 15%, outpacing the overall automotive industry where lobby group Society of Indian Automobile Manufacturers predicts volume to increase 7-9%.While the jury is still out on the actual impact of GST on various sectors, for luxury carmakers it has already given a reason to celebrate.Luxury vehicles now attract taxes as high as 55%, including central, state and city levies. The rate under GST, the all-encompassing indirect tax that will come into effect next month, will be 43%, including a 15% luxury cess. While this should theoretically make vehicles cheaper from July 1, companies cut prices by as much as Rs 11lakh immediately after the GST Council announced the rates late last month — a gamble to entice potential buyers who could otherwise wait for the GST rollout. The response has been positive and they expect the momentum to continue as the country transitions into the GST era.“We have seen a lot of consumer interest as we passed on the GST benefits to end-customers… There has been a substantial increase in queries,” said Roland Folger, MD at Mercedes-Benz India. “2016 was a year of disruption and lost opportunities. The first five months of the year (2017) have gone on according to plan and there is no reason so far why we can’t make up in 2017.”The company, the leader in the luxury segment in the past two years, expects 2017 volume to grow in double digits over the 13,200 units it sold last year.Mercedes-Benz’s German rival Audi , UK-based Jaguar Land Rover and Swedish carmaker Volvo also expect strong sales this year. BMW declined to respond to ET’s queries.Audi India head Rahil Ansari said based on the feedback the company has been getting from the market, “we do feel a comeback is imminent and growth may very well be in double digits”.Audi cut prices by up to Rs 10 lakh on its India-made vehicles that will benefit from the introduction of GST. Ansari said the company has been witnessing strong demand even prior to the price decision and that it has picked further up in recent days.“The benefits have been well-received and our dealers are experiencing higher footfalls and good conversions in sales,” said Ansari. Audi, which has lined up 10 launches for 2017, sees huge potential here going ahead and expects India to be among its top 10 global markets in the next 10 years.JLR, which announced price reductions up to 12% on a select stock of its five locally manufactured models, expects sales growth during the year to outpace the momentum seen in the overall industry on back of strong product interventions.“GST is definitely promising to spin out good benefits. Vehicle prices will come down and help expand the segment,” JLR India President Rohit Suri said. “We expect the industry to grow in double digits this year. We aim at outgrowing the industry.”Gaurav Vangaal, senior analyst on automotive forecasting at consultancy firm IHS Markit, said the price benefits being passed on by the companies will reflect on sales numbers for the year. “Given the momentum in the market, we will revisit the growth forecasts for the segment for the entire year,” he added.At the beginning of the year, IHS Markit had predicted the luxury car market in India to grow around 10% in 2017.Volvo, which recently decided to commence assembly operations locally, is also bullish on the India market. “We expect Volvo to grow 25% (from 1,600 to 2,000 cars in CY 2017),” managing director Tom Von Bonsdorff said. “Growth for us will come from a combination of new product launches, new dealer openings and concentrated brand building efforts.”