Maruti Suzuki, India’s largest carmaker is facing an unusual constraint which is robust demand but limited ability to supply. “Our growth is more or less determined by our ability to add capacity and continue to run at 100%,” said R C Bhargava, noting that plants are operating at peak utilisation with low inventories and a sustained order backlog.

Maruti Suzuki is currently running at an annualised output of around 2.4 million units, with around 1.3 lakh pending bookings, indicating strong traction across both small cars and utility vehicle segments. To ease supply-side constraints, the company has begun the process to capacity at its Kharkhoda and Hansalpur facilities, which together will contribute ~2.5 lakh units this year.

Broader expansion plan

This forms part of a broader expansion plan to add  over 5 lakh units in phases, with two large manufacturing hubs being scaled toward 1 million units each. The expansion is backed by a record Rs 14,000 crore capital expenditure in FY26, driven by investments in new plants and localisation initiatives.

Despite the strong demand environment, profitability remains under pressure. Bhargava pointed out that commodity costs have increased material expenses by about 2% of sales, weighing on margins. In addition, mark-to-market losses on financial instruments impacted recent earnings, though he described these as accounting-related and not structural.

On market share, the company appears less focused on headline numbers. “If we are running at 100% capacity and selling at reasonable profit, why should we worry about market share?” Bhargava said, indicating that utilisation and profitability take precedence over share gains.

Segment trends underline a mixed but stable demand environment. While small car sales declined about 10% in FY26, largely due to supply constraints, underlying demand remains intact. A significant portion of the 1.3 lakh customers in the waiting pipeline are for small cars, reinforcing their long-term relevance in a cost-sensitive market, according to Bhargava.

Exports are emerging as a key growth pillar, with shipments reaching 4.5 lakh units last year. The company expects new free trade agreements to open additional markets, strengthening India’s role as a global manufacturing base.

On alternative fuels, Maruti is stepping up investments in compressed biogas (CBG). Gujarat already meets about 10% of its gas requirements through CBG, a figure expected to rise to ~50% over the next two years, with plans to expand capacity in North India.

The company’s EV strategy, however, remains calibrated. Current sales of the eVitara are at around 1,500 units per month, with growth linked to charging infrastructure readiness. “We want to ensure that when a customer buys an EV, they can use it confidently,” Bhargava said, highlighting constraints such as charger installation and permissions.