India Car Industry to Reach 6.3 Million Units by FY31 as Small Cars Rebound
Updated
Updated · BusinessLine · Aug 9
India Car Industry to Reach 6.3 Million Units by FY31 as Small Cars Rebound
3 articles · Updated · BusinessLine · Aug 9
Summary
RC Bhargava said India’s passenger-vehicle market could expand to 6.1 million-6.3 million units by FY2030-31, with small cars set to grow much faster than in the past five years.
GST changes introduced on Sept. 22, 2025 are the main driver, he said, citing stronger GDP growth, buoyant tax collections and resilience in India’s economy despite the Iran-US war.
Maruti Suzuki’s own numbers underpin that view: FY2025-26 sales hit a record 24.22 lakh vehicles, exports 4.47 lakh, revenue ₹1.83 lakh crore and profit ₹14,445.4 crore.
After the new GST rates, Maruti’s retail sales rose 17% in the second half of last year; with more flexible production lines easing a 1.9 lakh booking backlog, first-quarter sales climbed 38% and small-car sales 35%.
Bhargava also tied growth to longer-term policy and energy shifts, urging faster business reforms while saying Maruti will spend ₹561 crore on four initial biogas plants to support India’s net-zero path.
Are GST tax cuts masking a temporary auto sales bubble, threatening Maruti's aggressive projection of a 6.3 million vehicle market by 2031?
Can flexible production lines truly erase Maruti's massive pending bookings, or will relentless SUV demand continue outstripping ambitious capacity plans?
Will Maruti Suzuki's massive biogas gamble pay off, or is it just a risky hedge against India's slow EV adoption?