RC Bhargava, Chairman of Maruti Suzuki India Ltd (MSIL), expects the company’s dominance in the smaller car segment to grow following last month’s reduction in the Goods and Services Tax (GST) from 28% to 18%.
Currently, MSIL holds a 69% market share in the car segment which falls under the 18% GST bracket. Since the tax revision, sales in this category have been growing at a healthy double-digit pace, significantly outpacing SUV sales, which fall under the 40% tax bracket.
"I see that (MSIL share in the small car segment) is going up slowly as the number of small car sales goes up. It is not going to remain at 69%. It is going to become a higher figure,” said Bhargava while announcing MSIL’s Q2FY26 earnings performance.
He said MSIL currently has total bookings of 3.5 lakh units, of which 2.5 lakh are for cars in the 18% GST segment. “Bigger cars are also selling, but not as much. For example, in October, after the festive period, Maruti Suzuki’s retail sales growth remained strong at 20%. Small cars (in the 18% GST category) grew by 30%. Big cars have also grown by around 4 to 5%. This clearly shows that many people still want to buy small cars,” said Bhargava.
He added, “I am sure this heavy rate of growth, which we have witnessed, cannot be sustained. But I also expect that in the small car segment (18% segment), a double-digit growth should be possible for some period to come.”
Bhargava also noted that considering the GST rate change and its impact on small cars, the company's earlier forecast of production and the sale projections for 2030-31 are bound to undergo some changes.
He said the perception among some carmakers that Indians no longer aspire to own small cars and that the market has shifted entirely toward larger, more premium vehicles has proven incorrect. Bhargava added that automakers will now better understand the true nature of the Indian car market and may revise their product mix accordingly.
Maruti Suzuki India’s Senior Executive Officer for Marketing and Sales, Partho Banerjee, said the retail contribution of MSIL’s entry-level cars -- the Alto K10, S-Presso, WagonR, and Celerio -- in the company’s portfolio was 16.7% from April to September in the pre-GST period. After the GST revision, this share has risen to 20.5%.
“Nowadays, we are counting the number of helmets in our showroom. In all our discussion tables, we find that there are many helmets lying around. These are of a new type of customers who are coming, the two-wheeler owners who want to upgrade to a four-wheeler,” said Banerjee.
MSIL, the country's largest carmaker, on Friday recorded a 7.95% year-on-year (YoY) rise in its consolidated net profit for the July-September 2025-26 quarter (Q2FY26) at Rs 3,349 crore. Revenue from operations grew by 13.07% to Rs 42,344.2 crore in Q2FY26 from Rs 37,449.2 crore in the corresponding period last year.
