Maruti Suzuki Navigates Export Gains Amid Domestic Demand Challenges

Maruti Suzuki India reports record Q4FY25 sales but anticipates soft domestic demand ahead. The company bets on new models, export growth, and product innovation to counteract challenges, including market volatility and entry-level segment struggles, while holding a retail market share of 41%.

Maruti Suzuki India (MSIL) has announced record quarterly sales for Q4FY25, yet the company warns of potential weakened demand in the domestic passenger vehicle market. A research report by LKP suggests that while product and export initiatives are robust, a shrinking domestic market could overshadow these efforts.

For the fourth year in a row, MSIL remains India's leading passenger vehicle exporter. The expected launch of the E-Vitara in H1FY26 and robust demand for models like the Jimny are projected to boost exports. Despite these forthcoming additions and gains in the CNG and export sectors, they're seen as only partially mitigating domestic challenges.

MSIL aims to sell 700,000 CNG units in FY26 and anticipates a 20% increase in export volumes. However, challenges in newer markets, such as Japan, and volatile demand raise concerns about sustaining growth. Product innovation through the introduction of the E-Vitara, another SUV, and export momentum are strategic priorities, albeit domestic entry-level demand and market uncertainties remain obstacles.

In recent investor discussions, MSIL revealed plans for a small hybrid car, driven by hybrid demand, and earmarked a capital budget of Rs 8000-9000 crore for FY2026. Although a second plant in Gujarat is unlikely due to current demand, the focus remains on safety with standard six airbags in all cars.

On potential impacts from changes like increased income tax slabs, MSIL doubts any significant influence on small car sales. The company, unaffected by US tariffs due to no exports there, maintains a 41% market share and seeks gradual growth in the domestic market.

(With inputs from agencies.)