Maruti Suzuki foresees subdued passenger vehicle demand in coming years, increasing challenges looms ahead

Maruti Suzuki is expecting a challenging time ahead owing to weakening domestic demand for passenger vehicles, which threatens to overshadow the OEM's product and export strategy. The car manufacturer expects subdued domestic passenger vehicle demand in the coming years to be a major concern. This comes despite the auto company recording the highest-ever quarterly sales in the fourth quarter of the last financial year and maintaining a strong momentum in the rural and export markets.

A research report by LKP has stated that Maruti Suzuki is facing an increasingly challenging landscape due to weakening domestic PV demand. The automaker maintained its position as India's top passenger vehicle exporter for the fourth consecutive year in FY25. Its export numbers are poised to grow further following the upcoming launch of the Maruti Suzuki e-Vitara by September this year and strong demand for the Maruti Suzuki Jimny. The launch of new models such as the e-Vitara and an upcoming SUV, along with gains in the CNG and export segments, is expected to provide some cushion, though. However, these efforts may only partially offset the domestic headwinds the brand is likely to face in the coming years.

Maruti Suzuki is targeting to sell 700,000 CNG cars in FY26 and projects a 20 per cent rise in export volumes. However, with volatile external demand and challenges in sustaining growth in newer export markets, such as Japan, the overall outlook remains cautious, claims the report.

Innovation and export in focus for driving growth

With the launch of the e-Vitara and another SUV lined up for FY26, Maruti Suzuki is banking on product innovation and export momentum to drive growth. Nevertheless, soft domestic demand, especially in the entry-level segment, and uncertainty in external markets pose significant hurdles.

In its investor call, the car manufacturer stated that, given the demand for hybrid cars, the company is developing a small hybrid car. It also said that for FY2026, the company plans a capital budget of ₹8,000-9,000 crore, however, the company is in no hurry for a second plant at Gujarat as there is not enough demand.

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