Maruti Suzuki expects India’s passenger vehicle market to reach 6.3 million units by FY31, driven by a revival in small-car demand and continued SUV growth
India’s passenger vehicle market could grow to 6.1 million-6.3 million units by financial year 2030-31, Maruti Suzuki India Chairman R.C. Bhargava said, as the country’s largest carmaker expects demand for small cars to recover and sport utility vehicles (SUVs) to remain a key growth driver.
Maruti Suzuki is reassessing its five-year growth targets as it expects the small-car segment to expand significantly faster than it did over the past five years, the company said in its annual report for 2025-26.
The projected market size would represent a significant expansion from current levels and could give Maruti room to accelerate sales and production as it seeks to strengthen its position across both small cars and SUVs.
Small cars make a comeback
Small cars have faced pressure in recent years as buyers increasingly shifted towards SUVs and other larger vehicles. Higher ownership costs and changing consumer preferences have also weighed on demand for entry-level cars.
Maruti, however, expects this trend to change.
The company said the small-car segment could grow significantly faster over the next five years than it did during the previous five-year period. A revival in demand for affordable cars could therefore become an important part of Maruti’s next phase of growth.
More from BusinessAt the same time, SUVs are expected to remain a major pillar of the Indian passenger vehicle market.
Maruti Managing Director and CEO Hisashi Takeuchi said the company plans to launch seven new SUVs over the next five to six years as it looks to strengthen its presence in the fast-growing segment.
The company has already expanded its SUV portfolio with models such as the Grand Vitara, Brezza and Fronx, as it seeks to compete more aggressively in a segment where rivals have gained market share.
Rs 35,000 crore investment
To prepare for higher demand, Maruti plans to invest about Rs 35,000 crore ($4 billion) to increase its annual production capacity to 3.65 million vehicles by FY31.
The carmaker has also accelerated its capacity expansion plans, adding 500,000 units of manufacturing capacity in FY27.
The expansion comes as Maruti reported record vehicle sales in FY26. It sold 2.42 million vehicles during the year, while exports reached an all-time high of 447,000 units.
Maruti said it expects to reach its next million-unit sales milestone earlier than previously projected, reflecting its expectations of stronger demand and increased production capacity.
The company is also focusing on localisation and alternative sourcing to reduce its exposure to geopolitical tensions and global supply-chain disruptions.
It plans to strengthen supplier capabilities and increase local sourcing as it expands production.
Closer Suzuki integration
Maruti said its relationship with parent Suzuki Motor Corporation has become “closer and more integrated”, helping the company shorten vehicle development cycles and lower costs.
The closer integration is expected to support Maruti as it prepares to launch new models and expand its product range over the coming years.
The Indian carmaker is also looking to strengthen its clean-energy strategy.
Its board has approved an initial investment of Rs 561 crore to establish four biogas plants. Chairman Bhargava said biogas could help reduce dependence on imported compressed natural gas and contribute to India’s net-zero ambitions.
The move comes as automakers face growing pressure to reduce emissions while maintaining affordability for consumers.
Betting on the next phase of growth
Maruti’s strategy reflects a broader shift in India’s automobile market. While SUVs have transformed the industry’s product mix, the company believes rising incomes, improving affordability and changing consumer demand could revive the small-car market.
The combination of small-car recovery and continued SUV growth could push India’s passenger vehicle market towards 6.1 million-6.3 million units by FY31.
For Maruti, the challenge will be to capture that growth while defending its position in a market that has become increasingly competitive.
With higher production capacity, a larger SUV portfolio and renewed expectations for small cars, the company is positioning itself for what it sees as the next major growth cycle in India’s passenger vehicle market.
With inputs from agencies.
