Maruti Suzuki will invest ₹77,500 crore between FY27 and FY31 as the country’s largest carmaker prepares for higher vehicle demand, with the investment being directed towards capacity expansion, new model development, research and development, plant maintenance, sales and marketing infrastructure, carbon-reduction measures and logistics, the company said at its annual general meeting (AGM) on Monday.
For FY27, Maruti Suzuki has budgeted ₹14,000 crore of capital expenditure, a 40% increase from ₹10,000 crore in FY26. The company expects its installed production capacity to rise to 2.9 million vehicles by the end of FY27 and 3.65 million vehicles by FY31 as it expands manufacturing facilities in India.
Chairman RC Bhargava said the company is reassessing its long-term production and sales targets following the recent goods and services tax (GST) reforms, which he said have provided fresh impetus to the automobile industry and several other sectors of the economy.
“The company is in the process of making as accurate an estimate as possible of the likely growth of the car market in the next five years, a happy exercise necessitated by the GST reforms. This could lead to some changes in our long-term production and sales targets,” Bhargava told shareholders.
Maruti Suzuki currently estimates that India’s passenger vehicle market could grow to 6.1-6.3 million units by 2031. More significantly, Bhargava expects the share of small cars to grow considerably faster over the next five years than it did during the previous five years.
The outlook comes after a sharp recovery in demand for small cars. Maruti Suzuki’s small-car sales grew 17% in the second half of FY26 and accelerated to 35% in the first quarter of FY27. Managing director and CEO Hisashi Takeuchi said small-car volumes increased 63% between April and July, while the company commanded an 83% share of the segment.
The company’s overall sales grew 38% in the first quarter, compared with 28% growth for the industry.
The rebound in small cars has prompted Maruti Suzuki to reassess its manufacturing strategy. The company ended FY26 with around 1.9 lakh pending bookings because it did not have adequate capacity for some models in demand. Bhargava attributed this partly to capacity adjustments made over several years as demand for small cars weakened and consumers shifted towards SUVs.
Maruti Suzuki is now designing its new production lines to be flexible enough to switch between platforms and models as demand changes.
EV portfolio to expand
Maruti Suzuki said its first electric vehicle, the e Vitara, has been well received in overseas markets, with nearly 41,000 units exported. Domestic sales stood at around 5,648 units, with production constraints affecting volumes as the new facility scales up.
The company said it will continue expanding its EV portfolio and localising electric-vehicle components, including batteries, as India’s EV supply chain develops.
Takeuchi said the company initially entered the EV market with a mid-to-upper segment model because charging infrastructure in India remains uneven. As the charging ecosystem improves, Maruti Suzuki will consider adding more EVs to its portfolio.
CNG remains key powertrain
CNG is continuing to gain traction in Maruti Suzuki’s portfolio. Sales of CNG vehicles increased 22% to 7.46 lakh units in FY26, while sales rose 58% to 2.2 lakh units in the first quarter of FY27.
The company is targeting sales of around 9 lakh CNG vehicles in FY27.
Maruti Suzuki is also evaluating compressed biogas (CBG) as a longer-term alternative-fuel option. Bhargava said the company had initially planned four pilot biogas projects but may now consider expanding the programme given the potential benefits for agriculture, the environment and reducing dependence on imported fossil fuels.
The company expects CNG and CBG to remain important components of its multi-powertrain strategy even as it expands its EV portfolio.
Exports to rise
Maruti Suzuki expects exports to increase further this year despite geopolitical challenges, targeting around 4.8 lakh vehicles.
The company exported more than 4.4 lakh vehicles in FY26, registering growth of around 74%, and now accounts for about half of the country’s passenger vehicle exports.
Japan has also emerged as an important export market for Maruti Suzuki and has become its second-largest export destination. The company said trade agreements with markets such as the UK and the European Union could create further opportunities to expand exports.
Maruti Suzuki is currently the largest exporter of EVs from India, with around 90% of the country’s EV exports, according to the management.
SUV play
Responding to shareholder concerns over Maruti Suzuki’s relatively weaker presence in larger SUVs and premium MPVs, the management said it has introduced seven new SUVs over the past five years and will continue expanding its SUV portfolio.
The company said it would seek to increase its presence in the SUV segment while maintaining its leadership in small cars.
The company said it is undertaking several cost-reduction initiatives, including productivity improvements, localisation and other measures to protect margins.
