Maruti Suzuki bets on exports to drive growth in FY26 amidst PV slowdown

Maruti Suzuki, the country’s largest passenger vehicle manufacturer is betting on exports to drive growth in FY26, as the industry anticipates a slowdown. The company will focus on increasing exports by 20% in FY26, R. C. Bhargava, Chairman, MSIL, told reporters in a post-earnings call on Friday. 

Maruti Suzuki reported a 4% decline in its net profit to Rs 3,911.1 crore in the March quarter of FY25, as against Rs 3,952.3 crore in the same period last year. The company’s exports grew by 17.5%. 

“We are doing good not because of domestic sales; we are doing better because exports have been buoyant. Export growth in FY25 was as high as 25%...We are now about 43% of the domestic exports. In the coming year, the situation is going to be very similar. Exports are expected to increase by 20%. And that is going to be the main driver for our total production and sales,” says Bhargava. 

Notably, Bhargava reiterated that revival of small car segment is crucial for the growth of passenger vehicle industry. Maruti Suzuki witnessed a 9% decline in its small car segment in Q4.

“If 9% is the decline in cars which are bought by 88% of the people in this country, then where will you get growth? It’s a fact that people have to look at and recognise. It’s not as some people seem to think that India has become affluent and everybody wants to buy expensive cars. That would happen if the number of people having an income above ₹12 lakh increases from 12% to 50%. But that’s not true today,” Bhargava observed.

According to Bhargava, it's a fallacy to believe that the decline in the small car segment and the rise of the SUV segment are due to changing consumer aspirations. “Only around 12% of households in India earn over Rs 12 lakh annually and can consider buying a car priced at Rs 10 lakh or more,” Bhargava pointed out.

“Car buying in India is largely restricted to this 12%. How can you expect growth when 88% of the country is at a level where they cannot afford these cars?” he added.

Notably, Bhargava doubts that the Rs 12-lakh tax relief in the union budget will reprieve the small car segment. “The cost of the car has gone up by ₹90,000 this year. People are not going to put all their income tax savings aside to buy a car. These are small households. They have many requirements. A new car will not be the top requirement of these people,” Bhargava notes. 

Meanwhile, Maruti Suzuki will start sales of e-Vitara, its first electric vehicle, in the second half of this year. According to Bhargava, the company will initially focus on export of its EV. The company plans to produce 70,000 units this year.