Maruti Suzuki’s Chairman, R. C. Bhargava, has indicated that a decision on establishing the company’s fifth manufacturing plant is on the horizon, with an announcement anticipated in the coming months. This strategic move comes as the company observes a significant resurgence in small car sales, partly attributed to the recent Goods and Services Tax (GST) rate reductions. Bhargava noted that this trend challenges the notion that Indian car buyers have universally moved towards larger, more premium vehicles, suggesting that manufacturers may need to reassess their product strategies. The proposed new plant, slated for Gujarat with an estimated investment of Rs 35,000 crore, signifies Maruti Suzuki’s commitment to expanding its production capabilities. This expansion is crucial as the company revises its long-term financial projections, which were initially set to double turnover to Rs 1.68 lakh crore by 2030-31 with an annual production target of 40 lakh units. While the full impact of GST is yet to be reflected in financial results, the second half of the fiscal year is expected to show considerably stronger sales volumes compared to the first half. Data confirms the positive impact on entry-level segments, with their retail sales contribution rising to 20.5% post-GST reduction, a notable increase from the previous 16.7%.
