Company finalizes fifth plant decision as Kharkhoda expansion proceeds, supporting export targets of 800,000 units and domestic growth ambitions.
03 Nov 2025 | 2461 Views | By Shristi Ohri
Maruti Suzuki has committed ₹70,000 crore in capital investments through fiscal year 2030-31, CFO Arnab Roy disclosed, as the company expands manufacturing capacity to support both surging domestic demand and ambitious export targets reaching 750,000-800,000 vehicles annually.
The investment program encompasses multiple capacity expansion initiatives at various stages of ...
This is an Autocar Pro Plus article. Subscribe to continue reading.
Maruti Suzuki has committed ₹70,000 crore in capital investments through fiscal year 2030-31, CFO Arnab Roy disclosed, as the company expands manufacturing capacity to support both surging domestic demand and ambitious export targets reaching 750,000-800,000 vehicles annually.
The investment program encompasses multiple capacity expansion initiatives at various stages of implementation. At the Kharkhoda facility in Haryana, the first production line is fully operational and contributing to current output, while the second line will be commissioned in the first few months of the next financial year, Chairman R C Bhargava confirmed.
"Decisions regarding the fifth plant are close to being finalized, and you will hear something about that in the course of the next few months," Bhargava stated, indicating that a major capacity announcement is imminent.
The fifth plant represents a significant strategic decision for India's largest carmaker. While the location hasn't been disclosed, industry speculation has centered on whether Maruti will expand existing sites or establish presence in a new state to diversify its manufacturing footprint and potentially capture additional incentives.
The capacity expansion comes at a pivotal moment as the company navigates dramatically shifted demand patterns following the government's GST reduction on small cars. Production teams have worked multiple Sundays to meet surging orders, with 350,000 current bookings including 250,000 in the 18% GST category where Maruti holds 69% market share.
"We are currently finalizing our long-term projections, but the production and sales outlook for 2030-2031 are bound to see some changes due to the revised GST structure," Bhargava explained, suggesting that the tax revision has prompted reassessment of capacity requirements.
The ₹70,000 crore investment supports not just domestic expansion but also Maruti's emergence as India's largest automobile exporter. The company has already shipped 200,000 units in the first half of the current fiscal year and expects to cross 400,000 for the full year—a trajectory that requires sustained capacity additions to reach the 750,000-800,000 annual export target by 2030-31.
"This export business is going to be a major part of our business, and it is contributing significantly to the profitability of the company," Bhargava emphasized, highlighting exports as a strategic pillar rather than merely an outlet for excess capacity.
The company exports to more than 100 countries globally and has begun shipping the e-Vitara electric SUV, with 7,000 units already exported to 12 countries. The United Kingdom ranks as the top destination, with strong demand also from European markets and Japan.
President Hisashi Takeuchi of Suzuki Motor Corporation noted that export commitments require sustained capacity: "If you get into an export market, you establish your dealers there, you establish your service networks there, then you have to continue to sell cars in that market. We can't suddenly cut them off."
The investment program also reflects enhanced manufacturing flexibility. Bhargava highlighted that Maruti has transformed its production capabilities to respond more dynamically to demand fluctuations. "Earlier on, we were not flexible in our production lines. We now have far greater flexibility than ever before, and we will now be able to produce the vehicles which customers demand," he stated.
This flexibility has proven crucial as the product mix shifts toward small cars in the 18% GST category following the tax revision. The ability to quickly adjust production allocations across models within the same facilities maximizes asset utilization and responsiveness.
The Kharkhoda facility, operated by Maruti Suzuki India Limited rather than the Suzuki Motor Gujarat subsidiary that runs the Gujarat plants, represents the company's latest greenfield manufacturing complex. The site's phased expansion approach allows capacity additions to be calibrated with demand growth while maintaining capital efficiency.
Beyond manufacturing, the ₹70,000 crore investment envelope likely encompasses research and development for new models, electrification technologies, and digital systems. Takeuchi confirmed that several new models are under development for launch over the next five years, requiring substantial R&D investment.
The company has also invested in expanding its distribution network, adding more than 500 touchpoints in up-country markets over the past 18 months. These retail investments complement manufacturing capacity by ensuring that production can be effectively channeled to customers, particularly in rural and semi-urban areas showing strong growth.
The capital allocation strategy balances multiple objectives: meeting immediate domestic demand surge, supporting long-term export commitments, maintaining technological competitiveness, and achieving parent company Suzuki Motor Corporation's target of 50% Indian market share.
Industry analysts note that the ₹70,000 crore commitment represents one of the largest investment programs in Indian automotive history, reflecting both Maruti's scale and the capital intensity of modern vehicle manufacturing, particularly as emission norms tighten and electric vehicle capabilities become essential.
The investment timeline through 2030-31 spans seven fiscal years from FY24-25, averaging approximately ₹10,000 crore annually, though actual spending will likely be lumpy based on major plant commissioning schedules and model launch timelines.
Bhargava emphasized that the government's GST revision has created a more favorable investment climate by demonstrating policy responsiveness to industry needs. "I believe the government will recognize that lowering tax rates does a substantial amount of good in respect of production increase, in terms of people getting more convenient means of transport, and ultimately in raising the tax collections of government also," he stated.
The chairman characterized these as "long-term benefits" that justify substantial capital deployment, suggesting confidence that current market dynamics represent structural shifts rather than temporary phenomena.
As India's automotive sector positions itself as a global manufacturing hub, Maruti's ₹70,000 crore investment serves as both a vote of confidence in the domestic market and a claim to leadership in India's export-led growth strategy—backed by concrete capacity expansion that will reshape the company's production footprint over the remainder of this decade.