Maruti Suzuki’s Chairman, R. C. Bhargava, has indicated that the company is nearing a decision on its fifth manufacturing facility, with an announcement anticipated in the coming months. This strategic expansion is buoyed by a significant uplift in small car sales, a direct consequence of recent GST rate reductions. The revitalized demand for compact vehicles is challenging the perception that Indian buyers have entirely moved towards larger, more expensive car segments.
Bhargava conveyed this update during an earnings conference, also revealing that the company’s previous long-term objectives – aiming for a turnover of around Rs 1.68 lakh crore and an annual production capacity of 40 lakh units by 2030-31 – are set to be adjusted in light of the GST-driven market dynamics. The company is in the process of formulating revised projections. He also noted that the financial results for the second quarter do not substantially incorporate the GST impact, anticipating a much stronger sales performance in the latter half of the current fiscal year.
The substantial Rs 35,000 crore investment for the new plant in Gujarat, which will serve as Maruti Suzuki’s fifth production hub, underscores the company’s commitment to growth. Evidence of the market’s positive response is clear: the retail sales contribution from Maruti Suzuki’s entry-level small cars, including the Alto K10, S-presso, Wagon R, and Celerio, has climbed to 20.5%, up from 16.7% prior to the GST rate cut. This highlights the sustained popularity and affordability of these models.