Operating at 100% Manufacturing Capacity, Ramp Up Likely From May: Maruti Suzuki

India’s largest passenger vehicle maker, Maruti Suzuki India, reported muted domestic passenger vehicle growth in February wholesales. But the automaker said the wholesale numbers reflect production constraints rather than demand weakness, as the company is operating at 100% of its manufacturing capacity.

Maruti Suzuki’s total domestic passenger vehicle wholesales rose marginally by 0.1% year-on-year to an all-time high of 161,000 units in February. The trend was similar in January as well. When asked about the muted growth, the company’s Senior Executive Officer for Marketing & Sales, Partho Banerjee, said wholesale numbers reflect factory dispatches and do not accurately indicate underlying market demand.

“Our annual production capacity is 24 lakh units, almost 2 lakh units per month, but now we are operating at more than 100%. Had it been muted demand, our production team would not have been working on Sundays and holidays,” he said. Maruti Suzuki’s total wholesales in February, including exports, were at 2.14 lakh units.

Banerjee noted that retail sales rose 12% to 1.51 lakh units during the month, which he said underlines continued consumer traction even as wholesale dispatches remained constrained by output limits. “Our network stock is now just 12 days, out of which 7 days are in transit,” he said, adding that the Wagon R still has a waiting period of one month.

The company has been saying that demand for small cars has remained robust following the GST 2.0 reform. Wholesales of the mini segment, which includes models such as the Alto and S-Presso, remained largely flat at 10,238 units during the month, while dispatches in the compact segment, comprising Baleno, Celerio, Dzire, Ignis, Swift and Wagon R, declined 9% to 66,386 units.

The management said dispatches in the entry-level segments were stepped up in December, and production has since been recalibrated to balance demand across other segments. Utility vehicle sales, including models such as the Brezza and Ertiga, grew 11.9% to 72,756 units, reflecting strong demand for SUVs.

However, Banerjee noted that the production constraints would ease, likely by May this year, as the automaker’s second production line at its new Kharkhoda facility in Sonipat will come online in April.

“Maybe from May onwards, we will be able to further scale our numbers,” he said. The total annual capacity of the second line at Kharkhoda will be gradually ramped up to 1-1.2 lakh units over time.

Maruti Suzuki is preparing to add nearly 500,000 units of annual manufacturing capacity over the next year. This includes the second line at its Kharkhoda facility and the commissioning of the D Line, the fourth manufacturing line at its Gujarat plant.

The company has also announced plans for a second greenfield plant in Gujarat, signalling a longer-term capital commitment. The capacity expansion plans were accelerated after the GST reform, as demand across the passenger vehicle market rebounded more sharply than anticipated.

The company recently launched its first battery electric vehicle, the e-Vitara, and has said its production will be limited to 2,000-2,500 units per month till July due to capacity constraints.