Maruti Suzuki India’s Chairman, R. C. Bhargava, has indicated that a definitive decision regarding the company’s fifth manufacturing plant is on the horizon, with an announcement expected within the next few months. This strategic move is partly fueled by a significant uptick in small car sales, spurred by the recent GST rate adjustments. This resurgence challenges the notion that the Indian automotive market has entirely shifted towards larger, more premium vehicle segments.
During a recent earnings conference, Bhargava confirmed that the company is actively finalizing plans for the new plant, which is slated to be established in Gujarat with an estimated investment of Rs 35,000 crore. The company’s ambitious long-term goals, including doubling turnover to approximately Rs 1.68 lakh crore by FY31 and achieving 40 lakh annual production units, are set to be revised in light of the GST impact. Current financial performance, particularly in the second quarter, is not yet fully reflective of these positive market shifts.
Bhargava anticipates a substantial improvement in sales volumes during the second half of the fiscal year compared to the first. This optimism is supported by data showing a notable increase in the market share of Maruti Suzuki’s entry-level small car portfolio. Models such as the Alto K10, S-presso, Wagon R, and Celerio now account for 20.5% of the company’s retail sales, a significant rise from the pre-GST rate cut figure of 16.7%. The positive sales momentum is expected to solidify the case for the new plant’s construction.
