Maruti Suzuki to reassess post-GST cut demand in three months

Car market leader Maruti Suzuki India will reassess in about three months to figure out what will be the sustainable level of demand after the euphoria of the GST rate cut is over, a senior company official said on Wednesday.

When GST 2.0 was announced in September last year, the company had projected a 7 per cent volume growth.

The company, which exports its electric vehicle to Europe, sees a big positive in the India-EU FTA and believes that the trade deal allows the country to participate in the global arena, Maruti Suzuki India Senior Executive Officer Rahul Bharti told analysts in an earnings call.

"Short term, of course, we are constrained by supply, and we are struggling to meet demand as much as possible. We have a healthy order book, our share within the SUV segment is growing, so it's all positive.

"Having said that, the query remains in our mind, what is the sustainable level of demand after the euphoria (of GST rate cut) is over," Bharti said.

The company had ended the third quarter with a very low network inventory of just about three to four days, along with a healthy order book of around 1.75 lakh vehicles, he added.

Responding to a query on the long-term demand outlook, Bharti said, "Quarter four seems to be good and we need to look beyond".

The company had projected an initial figure of about 7 per cent growth volume growth on a sustainable level, Bharti said, adding that "we will make an assessment in about three months of what is the sustainable level of demand in the next year and in the next few years".

The company said that owing to the GST reform, there was a sharp recovery in the Indian car market, primarily led by the small car segment. It achieved its highest-ever quarterly domestic sales of 5,64,669 units compared to 4,66,993 units in Q3 of the previous year, an increase of 97,676 units.

"Out of this increase, the small car segment in the 18 per cent GST bracket accounted for 68,328 units," it added.

When asked about the India-EU FTA, Bharti said, "The details that have come out seem to be quite positive. From whatever we have heard, the opening up has been done only above 15,000 euro CIF price, which translates to something like ₹25 lakh in India".

"I believe the government would have been extremely calibrated and sensitive to the domestic industry, while making India participate in the global arena, which is a big positive."

Asserting that Maruti Suzuki India has "always supported liberalisation and opening up trade, particularly as it gives us the opportunity to export", Bharti said.

"We put our money where our mouth is, and we are exporting EVs to Europe, so we welcome the FTA."

While noting that the specific clauses regarding EV exports are not yet known, Bharti said, "...but sooner or later, it should be positive for India".

He said till December 2025, the company has exported over 13,000 units of electric SUV eVITARA to 29 different countries, for which it has plan ship to over 100 countries.

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