Maruti Suzuki Eyes Double-Digit Sales Growth in H2 FY27, Flags Rural Demand and Export Risks

Maruti Suzuki India is targeting double-digit volume growth in the second half of FY27, supported by additional manufacturing capacity from January and strong demand for CNG and small cars, even as the country's largest passenger vehicle manufacturer warned that weak rainfall could affect rural demand and geopolitical tensions could constrain exports.

Speaking at the company's post-earnings media briefing on Tuesday, Partho Banerjee, Senior Executive Officer, Marketing and Sales, said Maruti remained confident of sustaining growth despite a high year-earlier base following the GST reforms introduced in September 2025.

"Subject to the capacity expansion, which is planned from January onwards, we are very much confident that we will be able to grow over the last year H2 and maybe we will aim for a double-digit number," Banerjee said.

The company had approximately 2.65 lakh pending bookings at the time of the briefing, providing visibility on near-term demand. Management said both rural and urban markets continued to perform well, although the impact of weaker rainfall on agricultural incomes remained a concern.

The optimism follows a strong first half. The company recorded its highest-ever quarterly sales of 6,96,654 vehicles during July-September, an increase of 26.5% year-on-year. Domestic small car sales grew 35.9%, while SUV sales increased 68.2%. The company's domestic passenger vehicle market share rose 2.2 percentage points to 40.8%.

Demand has also strengthened across the wider industry. According to the Society of Indian Automobile Manufacturers (SIAM), passenger vehicle wholesales increased 30.7% year-on-year to 13.6 lakh units during the September quarter, supported by improved affordability following GST reforms, new products and healthy festive demand.

CNG Sales Jump 44%, FY27 Volumes Seen Crossing 9 Lakh

CNG vehicles have emerged as a major growth driver for Maruti Suzuki, with sales rising approximately 44% year-on-year to nearly 4.5 lakh units during the first half of FY27.

The company expects full-year CNG volumes to exceed 9 lakh units, supported by higher conventional fuel prices, increased availability of CNG models and expansion of the country's refuelling network.

"CNG already in H1 we have done close to 4.5 lakh vehicles. The growth of almost 44%," Banerjee said, adding that the company's production and supply-chain teams were working to meet demand.

Maruti is currently selling nearly 80,000 CNG vehicles a month, although demand continues to exceed supply. Banerjee said the company had a substantial backlog of CNG bookings, including for the Victoris SUV.

The company is also seeing customers shift from diesel vehicles to CNG, particularly following the introduction of underbody CNG tanks and automatic transmission options.

Banerjee said newer CNG products were attracting buyers beyond the traditional cost-conscious customer base, supported by improvements in practicality and driving experience.

Rural Demand Resilient, but Drought Concerns Remain

While rural markets continue to support Maruti's growth, management acknowledged that deficient rainfall could affect demand in the coming quarters.

Banerjee said the rural contribution to the company's sales had increased by approximately 2.2 percentage points to nearly 52% during the first half of FY27. However, he identified Rajasthan, Madhya Pradesh and Karnataka as states facing agricultural stress because of weak rainfall, raising concerns about future farm incomes and vehicle purchases.

"Right now the impact is not there because this is the impact of the crop which they have sowed in the previous season," Banerjee said.

He added that the festive season continued to support demand, making it difficult to assess the full impact of weaker agricultural conditions. "So far we are not seeing the impact because it is a festival time. The response is pretty good," he said.

Export Growth to Moderate Amid West Asia Disruptions

Maruti Suzuki also expects exports to exceed the record 4,47,774 vehicles shipped in FY26, although geopolitical disruptions in West Asia are likely to limit growth.

Managing Director and CEO Hisashi Takeuchi said the company was trying to compensate for lost shipments in affected markets by increasing exports to other destinations.

"Last year, we did more than 440,000 units of exports. However, because of West Asia crisis, that is majorly affecting our exports. So we are trying to recover those losses with exports to other destinations," Takeuchi said.

He added that Maruti did not expect export growth to match the pace recorded in FY26. The impact was visible in the September quarter, when the company's exports declined 2.1% year-on-year to 1,08,119 vehicles from 1,10,487 units. However, exports for the first half increased to 2,32,855 vehicles.

The slowdown is also affecting the wider industry. According to SIAM, India's passenger vehicle exports declined 5.2% in Q2 FY27 to approximately 2.29 lakh units, partly because of logistics disruptions linked to the West Asia crisis.

Rahul Bharti, Maruti Suzuki's Senior Executive Officer, Corporate Affairs and Chief Investor Relations Officer, said the company's presence across 120 export markets helped reduce its exposure to disruptions in individual regions.