Suzuki Motor Cuts India FY31 Volume Target by 15% to 2.54 Million

With the falling share of the entry car segment and slowing growth rate, Suzuki Motor Corporation - the Japanese mini car specialist, has revised its long-term sales outlook for its Indian subsidiary downwards by 15%.

Presenting the new mid-term management plan "By Your Side," Suzuki Motor Corporation has guided for a volume of 2.54 million units by FY31 (Japanese FY30), as against the 3 million units target announced in October 2023.

The company is guiding for a slower compounded annual growth rate of 5% in the next six years as against the previous expected CAGR of 8%.

Despite this, India will increase its share of Suzuki’s global sales during this period, accounting for 60% of its total global sales, up from 56% in FY24, and will remain its fastest-growing market.

Meanwhile, Suzuki Motor Corporation projects its total global volumes to grow to 4.2 million units by FY31 from 3.16 million units in FY24. This is a CAGR of 4% over the next seven years.

Interestingly, while Suzuki has revised its volumes downward, its long-term revenue target has been increased by 1 trillion yen (₹57,700 crore) to 8 trillion yen (₹4,61,600 crore). It also has an operating profit target of 800 billion yen (₹46,160 crore) and a return on equity of 13%. This marks a strategic shift from a volume-driven approach to a focus on profitability amid slowing sales. Clearly, higher sales of SUVs and electrified vehicle technology will drive revenue growth over the next 5-7 years.

The downward revision comes as the automotive industry body, the Society of Indian Automotive Manufacturers Association has guided for another year of low single-digit growth for the passenger vehicle market to 1-4% in its recently held Looking Ahead conclave.

Maruti Suzuki's market share has remained under pressure due to a sustained move towards the SUV segment and a falling preference for the hatchback segment, which is its forte.

To be sure, UVs accounted for nearly a third of the Indian passenger vehicle market in the calendar year 2024, and the share of hatchbacks fell below 25% for the first time. More importantly, the mini car segment, which is the entry point for prospective Indian buyers, has fallen below 10% of the market, thereby putting pressure on Maruti Suzuki's market share.