Maruti Suzuki India Chairman R. C. Bhargava announced on Friday that the recent GST rate reduction has spurred a major revival in small car sales, challenging the perception that Indian consumers had universally shifted to larger, more aspirational vehicle segments. In light of this, he anticipates that several car manufacturers will likely revise their product mix.
Bhargava, speaking to reporters at an earnings conference, confirmed that the company is also close to making a decision regarding its plan to establish a fifth manufacturing plant, with an announcement expected within the next few months.
Financial projections and expansion plans
Bhargava confirmed that the company’s previous long-term forecast—which aimed to double its turnover to around Rs 1.68 lakh crore by 2030-31 and achieve an annual production of 40 lakh units—is “bound to undergo some changes” due to the GST impact. The company is currently finalising its revised long-term projections.
Regarding financial performance, he clarified that the Q2 results “do not reflect even to a substantial degree the impact of the GST”. He projected: “Overall, the second half in terms of sales volumes is going to be significantly different from what it was in the first half of the fiscal”.
In terms of physical growth:
New plant: “The fifth plant decisions are close to being taken, and I think you’ll hear something about that in the course of the next few months”. This refers to the planned new plant in Gujarat, an investment of Rs 35,000 crore.
Partho Banerjee, Maruti Suzuki India Senior Executive Officer, Marketing and Sales, added a specific detail: the retail sales contribution of the company’s entry-level small car segment (Alto K10, S-presso, Wagon R, and Celerio) has increased to 20.5 per cent after the GST rate cut, up from 16.7 per cent before.
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