Maruti’s small cars are roaring back
The country’s largest carmaker Maruti Suzuki expects passenger vehicle sales in the local market to grow to 6.1-6.3 million units per annum over the next
The country’s largest carmaker Maruti Suzuki expects passenger vehicle sales in the local market to grow to 6.1-6.3 million units per annum over the next five years on back of a revival in demand for small cars and strong traction for sports utility vehicles, Chairman R C Bhargava said.This would be an increase of about a third over 4.64 million cars sold in the country in FY26.The company in its annual report said it is re-evaluating its five-year growth targets due to the fresh momentum generated in the market post the GST reset as it expects the small-car segment to expand significantly faster than in the past five years.In his address to shareholders in the annual report of FY26, Bhargava said, “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.
This could lead to some changes in our longer-term targets.”133074027The assessment comes even as Maruti Suzuki is accelerating expansion plans across its facilities in Haryana and Gujarat. 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 unit will take Maruti Suzuki’s total installed capacity in the country 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% in the second half of FY2026. They accelerated by 35% in the first quarter of FY2027 as the company increased production of models facing strong demand.Overall, the company’s sales grew 38% in the first quarter, compared with 28% reported for the industry, Bhargava said. Retail sales had increased 17% in the second half of FY2026 following the implementation of revised GST rates onSeptember 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 lakhpending bookings of 1.9 lakh units.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.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.Separately, Maruti Suzuki’s board has approved an initial investment of Rs 561 crore to set up four biogas plants as part of its clean-energy strategy.
The BriefWire