Maruti Suzuki SwiftA revival in entry-level demand boosted Maruti Suzuki’s small car sales by 34.1 per cent in Q1 FY27, helping the automaker expand its market share to 41.2 per cent, up 2.3 percentage points from a year earlier.
“For the first time in many, many years, every aspect of our business seems to be highly positive…Small cars have come back with a bang,” said Rahul Bharti, Senior Executive Officer, Corporate Affairs, Maruti Suzuki India, during the company’s earnings call.
Maruti Suzuki believes it is now “close to SUV leadership” in absolute volumes. Maruti Suzuki SUV sales accounted for 218,885 units.
The company’s exports also remained resilient despite geopolitical disruptions. Shipments to other markets grew 28.6 per cent to 1,24,736 units in Q1 FY27.
Maruti Suzuki contributed over 55 per cent of India’s passenger vehicle exports during the period, while passenger vehicle exports by the rest of the Indian industry declined 8.4 per cent.
During the period, South Africa, Japan and Europe emerged as key overseas markets for the company.
“While exports to some markets in the Middle East were affected by the conflict, the company’s long-term strategy of diversifying exports across nearly 120 countries helped mitigate the impact. The conflict also resulted in logistical-related disruptions and volatility in shipping schedules,” he added.
Demand outpacing supply
India’s largest passenger vehicle maker maintained that demand continues to outpace supply and said growth this year would be constrained by production capacity rather than market demand. “We had mentioned in the beginning of the year that this year most likely our sales would be constrained by the supply side rather than the demand side. The demand side seems to be healthy,” Bharti said.
Dealer inventory for the company was around 13 days at the end of the July quarter, significantly below Maruti Suzuki’s optimal level of about one month, while the pending order book remained healthy at around 130,000 units.
Indian automakers expect higher output with newly commissioned manufacturing facilities. Maruti Suzuki recently commenced commercial production at the second plant in Kharkhoda, Haryana and the fourth manufacturing line at its Hansalpur facility in Gujarat, each adding 250,000 units of annual capacity.
On the growth outlook, the automaker retained its earlier growth outlook of 10 per cent.
“From the supply side, we still see headroom for around 10 per cent growth. With two new plants now commissioned, the key will be how quickly we ramp up these facilities and generate additional volumes. As of now, we are maintaining our earlier growth outlook,” Bharti added.
Commodity costs weigh on margins
Despite the strong volume growth, the automaker’s profitability came under pressure as the West Asia conflict triggered sharp increases in commodity, energy and logistics costs.
The automaker reported a 9.1 per cent YoY decline in consolidated profit to ₹3,447 crore for the quarter ended June 30, 2026, compared to ₹3,792 crore in the same period last year. This was due to higher operating expenses offsetting strong revenue growth.
Commodity inflation reduced margins by nearly 300 basis points. Along with this, 110 basis points of the impact came from the automaker’s decision to temporarily shift supplier settlements for commodities such as aluminium, plastics and rubber from a quarterly to a monthly basis to support supplier cash flows during the period of volatility.
“The company took a conscious decision during the quarter to prioritise supply continuity and support its supplier ecosystem during an extraordinary period of uncertainty,” Bharti said.
Bharti said temporary measures ensured uninterrupted production despite the whole industry undergoing supply chain challenges. The company expects the settlement cycle to gradually return to the earlier quarterly format over the next few quarters, allowing some of the cost impact to reverse.
Maruti Suzuki’s newly launched Brezza has received a strong initial response with around 2,000 units per day, while CNG vehicles now account for around 40 per cent of its overall sales.
Entry-level demand recovery was also reflected in the company’s customer mix, with first-time buyers accounting for approximately 54 per cent of total sales during the quarter.
Looking ahead, Maruti Suzuki is focusing on expanding its SUV portfolio, investing across multiple powertrain technologies including hybrids, EVs and hydrogen, and strengthening exports as it enters what management described as “a phase of renewed growth momentum.”
