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2025-10-31 21:14:50
[A Shift in the Indian Auto Market Landscape: Small Cars to Surpass SUVs as Growth Engine] ⑴ Maruti Suzuki, India's largest automaker, predicts that sales growth of small cars will surpass that of SUVs, stimulated by tax incentives. ⑵ Chairman Bhagava stated that retail growth for small cars, subject to an 18% tax rate, will outpace that of larger vehicles subject to a 40% tax rate. ⑶ India simplified its Goods and Services Tax (GST) structure on September 22, reducing the tax rate for small cars from 28% to 18% while increasing the tax rate for large vehicles to 40%. ⑷ Approximately 70% of Maruti Suzuki's production falls under the lower tax rate, and the company will directly benefit from this policy adjustment. ⑸ Second-quarter net profit increased by 7.3% to 32.9 billion rupees, lower than the market expectation of 35.93 billion rupees, underperforming expectations. ⑹ Operating profit margin contracted to 8.5% from 10.3% in the same period last year, mainly dragged down by rising commodity and marketing costs. (7) Domestic sales remained weak, with domestic sales declining by 4.8% in the first half of the fiscal year starting in April, including a sharp drop of 11.5% in the September quarter. (8) Exports became a bright spot, surging 42.2% to 110,487 units in the first half of the year, and total exports are expected to exceed 400,000 units for the fiscal year. (9) The company's stock price fell 1.6% on Friday, but driven by tax cuts, its year-to-date gain is still 49%, having reached a record high in August. (10) Facing competition from Hyundai and Tata Motors, Maruti Suzuki is continuously expanding its SUV product line to maintain its market position.
