Exclusive: Maruti Suzuki Sets 2.55 Million Unit Production Target for FY26, Bets Big on Electrification and SUV Growth

Maruti Suzuki has unveiled a bold operational blueprint for FY 25-26, setting a production target of 2.55 million units—a near 10% growth over the previous year. This includes domestic volumes, exports, and OEM supplies. 

At its annual vendor conference, Managing Director and CEO Hisashi Takeuchi outlined a multi-pathway approach—ICE, CNG, hybrid, flex-fuel, and BEV—to support the company’s broader ambition of regaining 50% market share. With its long-term target of 4 million units in annual capacity, Maruti is preparing for both product and powertrain diversification at scale.

A Maruti Suzuki spokesperson confirmed the development and told Autocar Professional, “The total production target of 2.55 million units is the sum of domestic PV sales, exports, OEM sales, LCV sales, and parts made for OEM model manufacturing. This target has been conveyed to the vendor partners, considering fluctuations, the need for margins, etc.”

As per SIAM estimates, industry growth is forecast to slow to 2–3% in the current financial year. Maruti, however, has remained bullish in its sales estimates, projecting 5–6% growth in domestic demand on the back of new launches and its deepening SUV and EV play.

Y17: Arena’s Big SUV Push — Positioned Between Brezza and Grand Vitara

A highlight of the FY26 plan is the introduction of a new five-seater SUV, codenamed Y17, aimed at expanding the SUV portfolio under the Arena channel. This new model is expected to be positioned above the Brezza and below the Grand Vitara, neatly bridging a gap in Maruti’s existing SUV line-up. Sources suggest the vehicle may be launched under the ‘Escudo’ nameplate, a trademark Maruti Suzuki recently secured.

Based on preliminary internal discussions from earlier dealer and vendor meetings, Y17 was initially conceived as a three-row SUV to rival the MG Hector Plus and Mahindra XUV700. However, the company has since repositioned the product to tap into the high-volume B-SUV segment, currently dominated by Hyundai Creta.

The SUV will be slightly longer than the Grand Vitara in dimensions, but more accessible in price and features. It will be offered with a hybrid powertrain and a dual-cylinder CNG variant, significantly expanding its appeal to fuel-economy-conscious urban and semi-urban consumers.

“We will bring two SUVs this year, one electric SUV (the e-VITARA) and another, the details of which will be shared later,” added the spokesperson without divulging specific details on its SUV plans.

 Scale Through Dual Channels: Domestic, Exports and Toyota OEM Supply

Maruti Suzuki targets a combined volume of 2 lakh units for the Y17 platform in FY26. Of this, 1 lakh units are earmarked for the domestic market through the Arena network. The remaining 1 lakh units will be split between exports and supplies to Toyota under their OEM partnership. This scale will enable cost efficiencies and improve platform viability.

Further strengthening this play, the Y17 will be manufactured at the company’s new Kharkhoda plant in Haryana. This plant is expected to offer better operating margins due to high levels of automation, component localisation, and supply chain proximity. The company’s ability to price the Y17 aggressively stems directly from these manufacturing efficiencies, allowing it to take on entrenched rivals in the segment.

Strengthening the Electrification Play

In addition to the Y17, Maruti will also roll out the e-VITARA around the festive season, marking its official entry into the mainstream EV space. The Grand Vitara (target: 2.64 lakh units) will be a key driver alongside high-volume models like Fronx (3.03 lakh), Baleno (2.73 lakh), Ertiga (2.32 lakh), and Swift (2.1 lakh).

Chief Operating Officer Sunil Kakkar communicated internally that Maruti’s medium-term strategy is focused on scale with localisation, investing in powertrain flexibility, and preparing for regulatory and consumer shifts. The goal is to secure long-term competitiveness, not just with volumes but a future-ready product mix.

Supplier Alignment Key to Multi-Powertrain Execution

The company has urged its vendor ecosystem to prepare for the complexities of a multi-powertrain landscape, encompassing hybrids, BEVs, CNG, and flex-fuel technologies. With the FY26 product calendar spanning diverse propulsion systems, ensuring supply chain synchronisation, quality stability, and production ramp-up readiness will be more critical and challenging than ever.

While the company’s scale of ambition is clear, execution risks remain significant. Maruti Suzuki is currently operating at its lowest market share levels in over a decade, and reclaiming lost ground will depend heavily on the continued success of its SUV strategy. With urban and semi-urban buyers shifting decisively toward SUVs, maintaining leadership in this segment is no longer optional; it is imperative.

Spokesperson said the company is pursuing a multi-pathway approach to carbon neutrality by incorporating various powertrain technologies, including battery electric vehicles, hybrids, CNG (including biogas), and internal combustion engines compatible with ethanol-blended and flex fuels.

The spokesperson added that Maruti Suzuki’s manufacturing infrastructure has been made increasingly flexible to allow the production of multiple models and variants. In preparation for the launch of its first electric vehicle, the e-VITARA, select production lines have been upgraded to accommodate EVs' structural and weight differences. The company also ensures that all newly developed lines are equipped to handle electric vehicle manufacturing.

A volatile global backdrop compounds the challenge. Rising input costs, fluctuating fuel prices, and a war-like geopolitical climate could disrupt supply chains and dampen consumer sentiment, particularly in a cost-sensitive market like India. FY26 may be positioned as a transformative year for Maruti Suzuki. Still, its success will ultimately rest on how well the company balances ambition with adaptability in the face of global and domestic headwinds.