Small-car market set to grow faster over next five years, Maruti Suzuki chairman R C Bhargava

India’s small-car market is set to grow significantly faster over the next five years than it has in the past five years, according to Maruti Suzuki India Ltd Chairman R. C. Bhargava, as the country’s largest carmaker by volume expects the overall passenger vehicle industry to expand to 6.1-6.3 million units by financial year 2030-31.

“The share of the small car market would grow significantly faster than its pace of growth in the last five years,” Bhargava said in Maruti Suzuki’s Annual Integrated Report 2025-26.

The recent GST reforms have provided fresh impetus to the automobile industry as well as several other sectors of the economy, Bhargava said, adding that Maruti Suzuki is working to make as accurate an estimate as possible of the likely growth of the car market over the next five years.

The outlook marks a potential reversal for India’s small-car segment, which has lost ground in recent years as consumers have increasingly shifted towards SUVs and other larger vehicles.

At the same time, Maruti Suzuki is preparing to significantly expand its SUV portfolio. Managing Director and CEO Hisashi Takeuchi said the company plans to introduce seven new SUV nameplates over the next five to six years.

“Reflecting our confidence in the medium-term outlook, we accelerated our capacity expansion plans. During FY 2026-27, we added 500,000 units of manufacturing capacity. Customer expectations continue to evolve rapidly. The company has plans to introduce seven SUVs in the next five to six years to further strengthen SUV portfolio,” Takeuchi said.

Maruti Suzuki has been expanding its presence in the SUV segment as demand for larger vehicles has risen, while continuing to retain a strong presence in the entry-level and compact-car segments.

The company registered its highest ever annual sales of 24.22 lakh vehicles and record exports of 4.47 lakh vehicles in FY26. Having achieved the 2 million sales mark for the third consecutive year, the company, supported by all the key growth drivers in place, is optimistic about reaching its next million-vehicle milestone earlier than anticipated.

Compressed biogas bet

As the Union cabinet cleared GOBARdhan scheme with a total outlay of Rs 23,731 crore on August 6, Maruti Suzuki has plans to invest Rs 561 crore to set up four biogas plants.

“Maruti Suzuki Board has approved that we start four biogas plants in the 1st phase, at a cost of Rs.561 crore, and once we have learnt more about the process and technology, we hope to invest substantial amounts of money in the production and distributions of biogas. It will provide zero emission fuel and reduce the pressure on CNG and on burning coal for generating electricity,” said Bhargava.

Under the GOBARdhan scheme, the government is planning a dedicated CBG Offtake Assurance framework to provide a reliable and predictable market for producers. Procurement by City Gas Distribution entities will support achievement of the notified CBG Obligation trajectory of 3% in FY 2026-27, 4% in FY 2027-28 and 5% from FY 2028-29 onwards in the CNG (Transport) and PNG (Domestic) segments.