Maruti Suzuki is entering the crucial festive season with just 16 days of inventory across its dealer network, well below the company’s preferred level of around 30 days, as stronger-than-expected demand has outpaced the pace of production ramp-up.
Partho Banerjee, senior executive officer, marketing & sales, Maruti Suzuki, said the company would have been more comfortable entering the festive period with around a month’s inventory, as customers typically do not want to wait for vehicles during the season. The company’s network stock was around 13-14 days at the beginning of the financial year and has risen only marginally amid strong sales.
“I have got very less stock of around 16 days. I would have been more happy if I had a stock of one month. Because during the festival time, people look forward to buying the cars. And having a stock of one month is always healthy,” he said.
The low inventory comes after an unexpectedly strong response to the company’s products, particularly the Brezza. The compact SUV has received more than 60,000 bookings in around 35-36 days.
Asked what went wrong with Maruti’s stock or production planning, Banerjee rejected the suggestion that the company had made a planning error.
“Selling more cars is not a mistake,” he said, adding that the company had not anticipated the extent of the demand.
Automated Line Ramp-Up
Banerjee said Maruti has installed two new production lines, each with a capacity to manufacture 2.5 lakh cars, but they are still being ramped up and will take around three to four months to reach full capacity.
“We have got automatic lines. Now, the lines which are set up are world-class. We are exporting globally. So, these are all automatic lines. Any automatic line setting up to reach to the full capacity takes time,” Banerjee said.
Maruti’s installed production capacity has already reached 2.9 million units a year.
He said the company was working with its production and supply-chain teams to meet market requirements. While the company has no fundamental capacity constraint, the ramp-up of production is taking time as demand is currently higher than supply.
Banerjee also said Maruti has gained more than two percentage points of retail market share compared with the industry, driven primarily by a sharp recovery in small cars and growth in the small commercial passenger segment. Its wholesale market share is currently around 42%.
The broader demand environment has also strengthened sharply.
Small Car Resurgence
Banerjee highlighted that Maruti’s growth is related with the growth in the small cars that have emerged as a major beneficiary, with the segment growing around 83%. WagonR volumes crossed 21,000 units last month, while Alto volumes were around 10,000, levels Banerjee said were last seen five to six years ago.
He attributed the revival to three factors: GST 2.0, changes in the income-tax regime that left more money with consumers for down payments, and a 100-basis-point reduction in repo rates that lowered EMIs.
Banerjee expects the overall Indian auto industry to grow by more than 10% in FY27, reaching around 5.3-5.4 million units compared with about 4.8 million last year.
He also said Maruti would continue with a multi-powertrain strategy covering EVs, hybrids and CNG. CNG currently accounts for around 43% of the company’s fuel mix. The company plans to introduce seven new SUVs over the next five years across segments and powertrains, including EVs and hybrids, while a small electric SUV is also in the pipeline.
