GST boost turns into production squeeze for Maruti Suzuki
February dispatches flat, nearly 1.9 lakh bookings pile up even as plants run at over 100 percent capacity, says executive
Last Updated: Mar 02, 2026, 11:53 IST2 min
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The GST cuts in September last year were meant to revive demand. At Maruti Suzuki, they have created a different kind of pressure: too many buyers, not enough cars.
India’s largest carmaker reported nearly flat domestic passenger vehicle dispatches in February at 1,61,000 units versus 1,60,791 a year earlier. Retail sales, however, rose 12 percent to about 1,51,000 units, a top executive said, indicating customers are buying faster than the company can replenish dealer lots.
Maruti said it is currently operating at over 100 percent capacity to keep up with a booking backlog of nearly 1.9 lakh units. “Bookings are growing by about 20 percent,” said Partho Banerjee, Senior Executive Officer for Marketing & Sales at Maruti Suzuki, on a media call on Sunday.
The company has resorted to working on Sundays and holidays to churn out vehicles, he said.
“Our production capacity is 24 lakh, almost 2 lakh per month, but now we are operating at more than 100 percent,” said Banerjee. “2.14 lakh in 28 days is something very close to almost 26 lakhs [annualised run-rate].”
The constraint has resulted in prolonged waiting periods. Network stock has plummeted to just 12 days, with seven of those days representing cars still in transit, Banerjee said.
The supply-side bottleneck is expected to ease significantly from May. Maruti confirmed that a new production line at its Kharkhoda plant is slated to start operating in April.
“From May onwards, we will be able to further scale our numbers,” Banerjee noted, adding that the new line will add approximately 1.2 lakh units of capacity.
A further capacity boost for electric vehicles at the Gujarat plant is scheduled for July to support the rollout of the eVitara.
Recalibrating Production
With limited slots on the assembly line, Maruti is playing a strategic game of musical chairs.
Utility vehicle sales grew 12 percent in February to 72,756 units, while the small-car segment declined 7.8 percent to 76,624 units.
“We are calibrating our production to ensure that none of the models has a long waiting period. One month we do mini, one month we do compact, one month we take care of utility vehicles,” Banerjee explained.
The company has doubled its mid-size SUV volumes, with its market share in the segment climbing from 12.8 percent to 19 percent.
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Green Focus
CNG penetration hit 44 percent in February, surpassing the company’s mission to have every third vehicle sold be a “green” vehicle.
The new eVitara is also seeing “amazing” traction, generating over 2,000 enquiries per day. However, the same production woes persist for the eVitara.
Despite the February friction, Maruti is on the verge of a historic milestone. The company is within what Banerjee described as “kissing distance” of 22 lakh units (domestic plus exports) for the full financial year.
Export Rush
While domestic growth looks static, the export business is in overdrive. Maruti shipped 39,155 units in February, a 56.5 percent surge.
“We were able to achieve our annual target of exports of 4 lakh within the first 11 months itself,” said Rahul Bharti, Senior Executive Officer, Corporate Affairs. “March will be extra.”
The eVitara is leading the charge globally, with over 21,000 units already exported to 39 countries, including the UK, Germany and Norway.
Iran Impact
On the ongoing conflict in Iran, Bharti said Maruti’s exposure to the Middle East is limited. “Only about 12.5 percent of our exports go to that region,” he said, and the company’s presence across roughly 100 markets diversifies risk. “While logistics adjustments might be needed in isolated cases, we aren’t anticipating material impact from current tensions.”
First Published: Mar 02, 2026, 11:59
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