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New Customers & Small Cars Drive Record Maruti Suzuki Q3 Sales - The GST 2.0 Effect
India's largest carmaker, Maruti Suzuki, reported a marked rise in demand for entry-level cars during the third quarter of fiscal 2025-26, driven in part by growth in buyers purchasing their first car as it hit record sales levels in Q3 FY 2025-26.
During the earnings call, Maruti Suzuki executives revealed that the share of first-time car buyers rose to around 47 per cent of total customers, compared with approximately 40 per cent earlier, a shift that the company linked to strong small-car segment performance.
The company's Q3 financial results showed that Maruti Suzuki achieved its highest-ever quarterly domestic sales of 564,669 units in the three months ending December, up from 466,993 units a year earlier, marking a sharp rebound in sales volumes.
The rise in first-time buyers coincided with broader improvements in the small-car market, a segment that had previously registered weak growth. However, thanks to the government's new GST slab of 18% for smaller cars under GST 2.0, these vehicles accounted for 68,328 additional units, a figure closely tied to entry-level models that are most likely to attract first-time buyers and consumers looking for value-for-money vehicles.
Maruti Suzuki reported that the small and compact cars category contributed a substantial portion of the incremental domestic volume that helped lift the overall sales performance. The company said the share of mini + compact cars (Alto, S-Presso, Baleno, Celerio, Ignis, Swift, Dzire, Wagon R) accounted for approximately 46.6 per cent of domestic sales in the quarter.
The GST reform introduced in September 2025 reclassified vehicles with petrol engines of 4 metres or less and diesel engines of 4 metres or less with a capacity below 1,200cc and 1,500cc, respectively, into the 18 per cent bracket, down from the earlier 28 per cent rate. This adjustment contributed to price reductions of up to Rs 1.3 lakh on several entry-level models.
The price adjustments made possible by the revised GST structure helped the SUV-styled S-Presso replace the Alto K10 as the cheapest car on sale, a shift tied to renewed affordability for consumers entering the passenger car segment for the first time.
Total sales, including exports, reached 667,769 units during the quarter. Total net sales for the period climbed to ₹475,344 million from ₹368,020 million a year earlier. Net profit for the quarter stood at ₹37,940 million, compared with ₹36,593 million in Q3 of the previous fiscal year, although this was impacted by a one-time provision linked to new labour code requirements.
As it looks to regain a 50% share of the Indian car market, Maruti Suzuki is expanding its annual manufacturing capacity. India's largest carmaker recently inked a deal with the Gujarat government to open up a new plant in the state in Kharoj and is set to commence operations at a second plant in its facility in Kharkoda in Harayana as it looks to keep pace with the ever-increasing demand for its cars.
Maruti Suzuki is also set to launch its first-ever EV, the e-Vitara, in India in the very near future. The e-Vitara, which is produced at its Gujarat facility in Hansalpur, is already being sold in European markets and Japan, and is expected to arrive on our roads in the final quarter of FY 2025-26.
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