Maruti Suzuki may revisit long-term targets as India car market heads towards 6.3 million units

Maruti Suzuki may revisit its long-term targets as it expects India’s passenger vehicle market to reach 6.1-6.3 million units by FY2031, with small cars likely to grow significantly faster than they did over the past five years.

The country’s largest carmaker is undertaking a fresh assessment of demand over the next five years following the momentum generated by the GST reforms, chairman RC Bhargava said in his address to shareholders in the annual report fo FY26.

“Presently, we are estimating that the car industry would grow to 6.1 to 6.3 million by FY2030-31 and that the share of the small-car market would grow significantly faster than what had happened in the last five years,” Bhargava said.

“This could lead to some changes in our longer-term targets,” he added.

The assessment comes as Maruti Suzuki accelerates its manufacturing expansion. Work has started on a new plant at Sanand in Gujarat, where the carmaker plans to invest Rs 35,000 crore and create annual capacity for one million vehicles.

Along with expansions at Kharkhoda and Hansalpur, the new plant will take Maruti Suzuki’s installed capacity to 2.9 million units by the end of FY2027 and 3.65 million units by the end of FY2031.

Maruti Suzuki’s small-car sales grew 17 percent in the second half of FY2026. They accelerated by 35 percent in the first quarter of FY2027 as the company increased production of models facing strong demand.

The company’s overall sales grew 38 percent in the first quarter, compared with 28 percent growth for the industry, Bhargava said. Retail sales had increased 17 percent in the second half of FY2026 following the implementation of revised GST rates on September 22, 2025.

The recovery in demand has exposed a mismatch between Maruti Suzuki’s production capacity and the models customers are seeking. The carmaker ended March 2026 with 1.9 lakh pending bookings because of inadequate manufacturing capacity for some models.

Bhargava attributed the shortage to production adjustments made over the past several years in response to falling small-car sales and the rapid growth of SUVs.

Maruti Suzuki is addressing the issue by making its new production lines flexible, allowing it to switch between platforms and models in response to changes in demand. Bhargava said the move had already started showing results, with more small cars being produced during the first quarter.

Two production lines have been commissioned at Kharkhoda in Haryana, while work is progressing on the third.

A fourth line, with an annual capacity of 250,000 vehicles, has been commissioned at Hansalpur in Gujarat. This has increased the facility’s installed capacity to one million units, making it Suzuki Motor Corporation’s largest manufacturing plant globally.

The company is also working more closely with parent Suzuki Motor Corporation to develop new models faster and at lower cost.

“In particular, we are working closer than ever to strengthen our capacity for building new models of cars in shorter and more cost-effective ways,” Bhargava said.

“Engineering strength is the core value that leads to success of a car company,” he added.