5th Maruti Suzuki Plant Decision Imminent, Driven by Small Car Revival

A decision regarding Maruti Suzuki’s fifth manufacturing plant is imminent, with Chairman R. C. Bhargava expecting an announcement within the next few months. This development is closely linked to a surprising surge in small car sales, a phenomenon Bhargava attributes in part to the recent GST rate reduction. He believes this trend necessitates a potential recalibration of product strategies across the automotive industry, countering the widely held view that consumers are exclusively opting for larger vehicles. Maruti Suzuki is currently revising its long-term financial targets, which had previously aimed for a Rs 1.68 lakh crore turnover and 40 lakh unit production by 2030-31. The impact of the GST cuts, while not fully reflected in Q2 results, is projected to significantly boost sales volumes in the second half of the fiscal year. The company plans to invest Rs 35,000 crore in the new plant, likely located in Gujarat. This expansion is a critical step in meeting future demand. The positive shift is further validated by an increase in the market share of entry-level small cars to 20.5% of retail sales, a rise from 16.7% post-GST.