Maruti Suzuki to Reassess Demand Projections Following GST Overhaul in Three Months

Maruti Suzuki India is set to reassess the car market demand in three months, following the GST rate cut excitement. A senior official stated that the company initially predicted a 7% volume growth after GST 2.0 was announced last September. The company, which exports electric vehicles to Europe, views the India-EU FTA as a significant opportunity for global participation.

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The company's Senior Executive Officer, Rahul Bharti, highlighted the positive impact of the India-EU FTA during an earnings call with analysts. He mentioned that the trade deal allows India to engage globally. "The details that have come out seem to be quite positive," Bharti said. "From whatever we have heard, the opening up has been done only above 15,000 euro CIF price, which translates to something like Rs 25 lakh in India."

GST Impact and Future Demand

Maruti Suzuki experienced a sharp recovery in the Indian car market due to GST reforms, especially in the small car segment. The company achieved its highest-ever quarterly domestic sales of 5,64,669 units, marking an increase of 97,676 units compared to Q3 of the previous year. The small car segment in the 18% GST bracket contributed 68,328 units to this growth.

Despite current supply constraints and a growing SUV segment share, Bharti expressed concerns about sustainable demand levels post-GST rate cut excitement. "Short term, of course, we are constrained by supply, and we are struggling to meet demand as much as possible," he said. The company ended Q3 with a low network inventory of three to four days and a healthy order book of around 1.75 lakh vehicles.

Electric Vehicle Exports and Global Trade

Maruti Suzuki has been actively supporting trade liberalisation and exports electric vehicles to Europe. Bharti stated, "We put our money where our mouth is, and we are exporting EVs to Europe, so we welcome the FTA." Although specific clauses regarding EV exports are not yet known, he believes it will eventually benefit India.

The company has exported over 13,000 units of its electric SUV eVITARA to 29 countries by December 2025. Plans are underway to ship these vehicles to over 100 countries. Bharti emphasised that Maruti Suzuki's commitment to global trade aligns with India's participation in international markets.

Looking ahead, Maruti Suzuki plans to evaluate long-term demand beyond Q4. Bharti mentioned that they would assess sustainable demand levels for the next year and subsequent years within three months. This evaluation aims to understand market dynamics after the initial GST rate cut impact subsides.

With inputs from PTI