The establishment of Maruti Suzuki’s fifth manufacturing plant is moving closer to reality, with Chairman R. C. Bhargava expecting a decision within the next few months. This strategic expansion is fueled by a robust revival in small car sales, a trend directly linked to the recent favorable changes in GST rates. This development challenges the assumption that Indian consumers have universally shifted away from smaller vehicles.
Speaking at an earnings conference, Bhargava confirmed that the company’s long-term financial and production targets, which aimed for a turnover of approximately Rs 1.68 lakh crore and 4 million annual units by 2030-31, will be revised to reflect the new market realities post-GST. The company is in the final stages of establishing these updated projections. He also pointed out that the second quarter financial results do not fully represent the impact of the GST reduction, forecasting a significantly better sales performance in the second half of the fiscal year.
A major component of this growth is the planned Rs 35,000 crore investment in a new production facility in Gujarat. This will mark Maruti Suzuki’s fifth manufacturing site. The positive effect of the GST rate adjustments is already evident in sales figures, with the share of entry-level small cars like the Alto K10, S-presso, Wagon R, and Celerio in total retail sales increasing to 20.5% from 16.7%. This resurgence underscores the continued demand for accessible and economical vehicles in India.