With $57 bn valuation, Maruti becomes 8th most valuable carmaker globally

Maruti Suzuki India has now entered into the top tier of the world's most valuable automakers, rising to eighth place globally by market capitalisation of around $57.6 billion, The Economic Times reported, citing ETIG data.

 

Maruti Suzuki India, the largest unit of Japan's Suzuki Motor, has surpassed global heavyweights like Ford Motor, General Motors, and Volkswagen AG. It has even surpassed its Japanese parent company.

 

Maruti's valuation surged past Ford Motor ($46.3 billion), General Motors ($57.1 billion), and Volkswagen ($55.7 billion), all of which have either stagnated or slipped in rankings over the past month. Its market cap has also surpassed Suzuki’s $29 billion.

 

Tesla dominates the global auto space

 

Billionaire Elon Musk's Tesla continues to dominate the global auto space with a market cap of $1.47 trillion, followed by Toyota ($314 billion), BYD ($133 billion), Ferrari NV ($92.7 billion), BMW ($61.3 billion), and Mercedes-Benz Group ($59.8 billion). Maruti sits at the eighth spot, right after Honda Motor, which has a market cap of $59 billion. 

 

Maruti benefits from next-gen GST reforms

 

Maruti Suzuki, which is India's largest carmaker, derives over 60 per cent of its sales volume from small cars. It has also been one of the biggest beneficiaries of the next-generation Goods and Services Tax (GST) reforms, implemented on September 22.

 

Business Standard recently reported that the company announced price cuts of up to ₹1,30,000 across its models. Partho Banerjee, senior executive officer, Marketing and Sales, MSIL, said, "In Alto K10, the reduction is in the range of 10.6-20 per cent; in S-Presso, 12.6-24 per cent; Celerio, 8.6-17 per cent; Wagon R, 8.7-14 per cent. This is a double bonanza for the festival season to accelerate motorisation in the country."

 

The industry trackers noted that the new GST rates have particularly helped small car makers, where Maruti has a strong hold. With lower taxes and improved affordability, Maruti's sales volumes have seen a boost, thereby improving the company's earnings outlook.

 

The company has been recording 15,000 bookings every day since the new GST rates were implemented, which coincided with the festival of Navratri, an official told The Economic Times, adding that the small cars of the company are also in high demand. On September 22, the first day of Navratri, the company delivered 30,000 orders.

 

Maruti's stock has rallied since August

 

Since August, when Prime Minister Narendra Modi announced the next-generation GST reforms on Independence Day, Maruti's stock has rallied 25 per cent, fuelled by investor sentiment.

 

On the stock markets, the company has outperformed the Nifty Auto Index, which rose nearly 11 per cent since mid-August. In the same period, Maruti's share price jumped from ₹12,936 on August 14 to ₹16,236 on September 25, marking one of the sharpest gains among leading auto stocks.