A significant expansion is on the horizon for Maruti Suzuki, as Chairman R. C. Bhargava announced that a decision on establishing the company’s fifth manufacturing plant is imminent and expected within the next few months. This development coincides with a notable resurgence in small car sales, directly attributed to recent GST rate cuts. This trend challenges previous assumptions about a universal shift towards premium vehicles among Indian consumers.
Bhargava shared these insights during an earnings conference, where he also confirmed that Maruti Suzuki’s ambitious long-term goals, which included reaching Rs 1.68 lakh crore in turnover and producing 40 lakh units annually by 2030-31, will undergo revisions due to the favorable GST impact. The company is actively working on its updated financial and production forecasts. He further elaborated that the Q2 financial figures do not yet fully reflect the positive influence of the GST reduction, with the second half of the fiscal year projected to witness significantly higher sales volumes compared to the first half.
The planned new plant, a substantial Rs 35,000 crore project slated for Gujarat, is a key component of Maruti Suzuki’s growth strategy. The positive impact of the GST reform is already visible in sales data, with entry-level models like the Alto K10, S-presso, Wagon R, and Celerio now accounting for 20.5% of retail sales, a marked increase from the pre-GST figure of 16.7%. This demonstrates the continued strong demand for budget-friendly vehicles.