The establishment of Maruti Suzuki’s fifth manufacturing facility is nearing a crucial decision point, according to Chairman R. C. Bhargava. He revealed that an announcement regarding the new plant, a significant investment expected to be located in Gujarat, is likely within the next few months. This strategic expansion is being driven, in part, by a surprising and strong revival in the sales of small cars, a segment previously thought to be declining as consumers gravitated towards larger vehicles. The recent reduction in GST rates has been credited with energizing this market segment.
Speaking at an earnings conference, Bhargava elaborated on the company’s future plans. The projected doubling of turnover to around Rs 1.68 lakh crore by 2030-31, alongside a production target of 40 lakh units annually, will undergo adjustments due to the positive impact of GST. Revised long-term financial forecasts are currently being compiled. He also highlighted that the financial results for the second quarter do not yet fully reflect the benefits of the GST rate cuts, anticipating a much stronger second half of the fiscal year in terms of sales volume.
The impact of the GST reduction is particularly evident in the entry-level small car segment. Maruti Suzuki’s Senior Executive Officer for Marketing and Sales, Partho Banerjee, pointed out that the share of these affordable models in retail sales has climbed from 16.7% to 20.5% following the tax adjustment. This resurgence in demand for economical vehicles signifies a sustained market for budget-friendly transportation options, bolstering Maruti Suzuki’s expansionary ambitions and the imminent decision on its fifth plant.