Maruti Suzuki Projects 10% Growth in Small Car Sales with GST 2.0 Rollout

Maruti Suzuki projects a 10% increase in small car sales following the GST 2.0 reform, which reduces the GST rate from 28-31% to 18%. This tax cut is expected to revive demand for the mass market segment, where Maruti has traditionally maintained a dominant share.

GST 2.0 Brings New Momentum to Maruti’s Small Car Segment

The introduction of GST 2.0 is set to revitalise India’s small car market, reducing the effective on-road prices by 6% to 8%. Maruti Suzuki, with small cars constituting nearly 70% of its overall sales, stands to benefit significantly from improved affordability and consumer sentiment. The automaker has been facing recent volume declines, with Mini segment sales falling 36.6% year-on-year in Q1 FY26 to 19,522 units, alongside a 6.3% slide in Compact car sales.

Demand Boost Ahead of Festive Season

The GST rate reduction comes at a strategic time, just before the festive season. With price-sensitive buyers now eligible for a sharper cost advantage, this is likely to stimulate new bookings and higher showroom footfall. The on-road pricing benefit is expected to enhance conversions, especially for entry-level models like Alto, Celerio, and Wagon-R.

Stock Performance Reflects Positive Sentiment

Despite subdued operating profit due to prolonged discounting strategies, Maruti’s stock has surged 20% over the last month. The share closed at ₹14,903 on NSE on September 5, 2025, registering a notable outperformance compared to the broader Nifty Auto index.

Read More: Maruti Suzuki Begins Export of e-Vitara Europe to 12 European Nations!

Sales Figures Signal Recovery Potential

Maruti’s FY24-25 small car sales had suffered a 9% drop, making this GST reform a timely catalyst. Total domestic sales in Q1 FY26 stood at 4,30,889 units, down 4.5% year-on-year, but the momentum is expected to reverse if the pricing advantages hit the market as anticipated by September 22, 2025.

Conclusion

The GST 2.0 regime is poised to be a game-changer for India’s passenger vehicle market, especially in the affordable car segment. Maruti Suzuki's focus and dominance in the small carcars segment position it well to benefit from the renewed demand trend. The upcoming festive season will be a crucial period to test this recovery path.

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