India’s car market is yet to see any meaningful disruption from the ongoing geopolitical tensions in West Asia, with demand and production holding firm for now, according to R C Bhargava, Chairman of Maruti Suzuki India Limited.

Speaking to reporters after the company’s FY26 earnings call, Bhargava said the situation on the ground remains stable. “There is minimal impact on the car market at present, in terms of customer demand and our ability to produce cars,” he noted.

His comments come at a time when the industry is closely watching the fallout of the West Asia crisis, particularly its impact on crude oil prices and supply chains. While global uncertainty has increased, Bhargava suggested that it has not yet translated into any visible slowdown in the domestic market.

The Indian passenger vehicle market grew by over 8.8% to 4.7 million units, and if disruption does not significantly affect the volumes, the country is on course to hit the 5 million units milestone. India is already the third largest market in the world, one of the rare bright spots in the world. The GST cut from the Government of India helped the car market come back on a strong growth momentum, and the centre is very keen that the growth momentum is sustained despite global disruption.

However, the comfort may prove temporary. Input cost pressures are already pushing vehicle prices higher, and a sustained spike in fuel prices could begin to erode demand, especially in entry and mid segments where affordability remains critical.

Rahul Bharti, Senior Executive Director of Corporate Affairs, said there was some cost impact from energy and commodity prices, at least until the war continues. Bhargava added that fuel prices could also rise, though it was too early to assess the impact, and much of it remained speculative.

In the quarter ended March 31, Maruti Suzuki posted consolidated revenue from operations of Rs 52,462.5 crore, a 28.2% increase from the year-ago quarter, but its net profit declined 6.4% year-on-year to Rs 3,659 crore.

Bhargava said commodity prices have risen sharply, and the cost of raw materials as a percentage of sales has increased by a further 2%, putting pressure on profitability. He also cited mark-to-market losses on treasuries as one of the factors that pulled profit down, noting that M2M losses are notional and do not impact the business.
Adding to the uncertainty, market experts point out that fuel prices could firm up after the election results, a move that may further stoke inflation and, in turn, push vehicle prices higher. That could create a double squeeze on consumers already grappling with rising ownership costs.

Much will depend on how long the West Asia tensions persist and how fuel pricing trends play out domestically. If energy and commodity prices continue to harden, the current stability in demand could come under pressure, even as automakers walk a fine line between pricing discipline and volume growth.

With inputs from Ketan Thakkar and Mugdha Mishra