Maruti Suzuki will invest Rs 77,500 crore between FY27 and FY31 as the country’s largest carmaker prepares for higher vehicle demand, with the spending earmarked for capacity expansion, new models, research and development, plant maintenance, sales and marketing infrastructure, carbon-reduction measures and logistics.

The auto major has budgeted Rs 14,000 crore of capital expenditure for FY27, a 40% increase from Rs 10,000 crore in FY26. Its installed production capacity is expected to rise to 2.9 million vehicles by the end of FY27 and to 3.65 million vehicles by FY31 as manufacturing facilities are expanded.

Chairman RC Bhargava said the company was reassessing its long-term production and sales targets following the recent goods and services tax (GST) reforms, which he said had given fresh impetus to the automobile industry and several other sectors.

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“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 at the company’s annual general meeting on Monday.

Maruti Suzuki currently estimates that India’s passenger vehicle market could grow to 6.1-6.3 million units by 2031. Bhargava expects the small-car segment to grow considerably faster over the next five years than it did during the previous five.

The outlook follows 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 had increased 63% between April and July, with the company commanding an 83% share of the segment.

Overall sales grew 38% in the first quarter, compared with 28% growth for the industry.

The revival in small-car demand has prompted Maruti Suzuki to reassess its manufacturing strategy. The company ended FY26 with around 190,000 pending bookings because it lacked 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.

The company is now designing new production lines with greater flexibility, allowing them to switch between platforms and models as demand changes.

EV portfolio to expand

Maruti Suzuki said its first electric vehicle, the e Vitara, had received a strong response 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 plans to expand its EV portfolio and increase localisation of 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 remained uneven. As the charging ecosystem improves, the company will consider adding more EVs to its portfolio.

CNG remains key

CNG continues to gain traction in Maruti Suzuki’s portfolio. Sales of CNG vehicles rose 22% to 746,000 units in FY26 and jumped 58% to 220,000 units in the first quarter of FY27.

The company is targeting sales of around 900,000 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 could expand the programme given its potential benefits for agriculture and the environment, as well as its ability to reduce dependence on imported fossil fuels.

CNG and CBG are expected to remain important elements of Maruti Suzuki’s multi-powertrain strategy even as the company expands its EV portfolio.

Exports set to rise

The carmaker expects exports to increase further this year despite geopolitical challenges, targeting around 480,000 vehicles.

The company exported more than 440,000 vehicles in FY26, registering growth of around 74%, and now accounts for about half of India’s passenger vehicle exports.

Japan has emerged as an important market and is now Maruti Suzuki’s second-largest export destination. The company said trade agreements with markets such as the UK and the European Union could open up further opportunities.

Maruti Suzuki is also currently India’s largest exporter of EVs, accounting for around 90% of the country’s EV exports, according to the management.

SUV push

Responding to shareholder concerns over its relatively weaker presence in larger SUVs and premium MPVs, the management said Maruti Suzuki has introduced seven new SUVs over the past five years and would continue to expand its SUV portfolio.

The company plans to strengthen its presence in the SUV segment while retaining its leadership in small cars.

Maruti Suzuki is also pursuing several cost-reduction measures, including productivity improvements and greater localisation, to protect margins.