Maruti Suzuki sees double-digit growth in FY27 as demand holds firm despite West Asia tensions

New Delhi: Despite geopolitical challenges due to the conflict in West Asia, the country’s largest carmaker said demand for its cars in the local market remains healthy outstripping supplies, prompting it to plan for double-digit growth in the ongoing financial year.

The company – which is starting the new year on a strong note reporting all-time high monthly sales of over 191,122 units in April – is looking at growing faster than the industry in FY27. Maruti Suzuki is targeting growing sales by more than 10% in the ongoing financial year, compared to industry growth of 5-7% projected for FY27.

Partho Banerjee, senior executive officer (marketing and sales) at Maruti Suzuki told ET, “We are starting the year with a bang. Our sales last month touched an all-time high. Growth is coming in from across segments, both from small cars as well as SUVs. We have been doing line testing because of which we could get some additional supplies last month to fulfil pending orders. Efforts are on to ramp up production quickly at our facility in Kharkhoda.”

Maruti Suzuki closed last month with pending customer orders for 165,000 vehicles. Dealer inventory was at a low of about 16-17 days’ stock.

Banerjee said while the automaker is closely monitoring the geopolitical developments, the market continues to offer opportunities. “We have three tailwinds going well – the GST cuts by the Centre which lowered prices of vehicles, the interest rate cuts by the RBI which reduced EMIs, and the raising of the income tax ceiling last year which put more money in the hands of customers for down payments,” he said.

Banerjee added the government too has recently assured that there will not be an immediate increase in fuel prices, which could otherwise have had an impact on demand in the price-sensitive small car segment. For now, Maruti Suzuki is largely constrained by capacity.

The company has earmarked a capex of Rs 14,000 crore for FY27 to add capacity in Kharkhoda (Haryana) and Hansalpur (Gujarat). Two new lines will add production capacity of 250,000 units each at the two sites. This fiscal, the company will be able to manufacture an additional 250,000 vehicles.

In the domestic market, the company expects to grow every year for the next few years because demand has revived post GST cuts. Maruti Suzuki plans to introduce products both in the 18% and 40% GST segments to shore up volumes and increase market share by catering to all types of customers.

Exports too fared well for the company growing by 43.5% to 40,0054 despite geopolitical disturbance. Rahul Bharti, senior executive officer, MSIL said the company is diversifying markets to contain any fallout on international business due to the West Asia crisis.