Maruti loses market share despite higher sales, stays unfazed

New Delhi: Maruti Suzuki is not losing sleep over market share erosion as its factories are running at full capacity and demand is outstripping supply, leaving the automaker facing an order backlog of around 200,000 orders, chairman RC Bhargava said on Tuesday.

India’s largest automaker sold 2.4 million cars in FY26, up 8% year-on-year; Domestic sales increased by 4% to 1.97 million units, and exports increased by 35% to approximately 450,000 units.

However, market share in passenger vehicles (cars + SUVs) declined from 40.9% in FY25 to 39.2% in FY26. Siam (Association of Indian Automobile Manufacturers).

Bhargava downplayed the decline while speaking to the media following the release of the company’s January-March quarter earnings.

“Whatever production capacity a company has set up, it is more important for it to make sure that it can utilize that capacity 100% and sell those cars at a reasonable profit,” he said, adding that the company is currently held back by production constraints.

Maruti’s current capacity of 2.6 million units is spread across four facilities: Hansalpur in Gujarat; and Gurugram, Kharkhoda and Manesar in Haryana – operated at almost full capacity in FY26.

“Our growth is now more or less determined by our ability to add capacity and of course we are operating at 100% (capacity utilization),” Bhargava said during the media conference.

In the current financial year, the company is set to add 0.5 million units of production capacity, which will be distributed equally across its Kharhoda and Hansalpur facilities.

Bhargava’s comments follow the company’s strong revenue growth, with FY26 consolidated revenues up 20% ₹1.83 trillion and Q4 revenues up 25% ₹52,946 crore.

Maruti Suzuki’s management believes that the growth rate will continue as demand remains strong while it evaluates whether to increase prices due to rising commodity costs.

Of course, rising commodity and employee costs hit the company’s profitability; Net profit increased steadily by 1%. ₹14,679 crore in FY26, down 6% from the previous year. ₹3,659 crore in Q4.

Analysts suggested that the company’s results were in line with expectations.

“Maruti Suzuki’s operating results were largely as expected and the margin impact in the quarter remained minimal. Management comments suggest the demand trend continues,” said Mrunmayee Jogalekar, auto analyst at Asit C Mehta Investment Intermediates Ltd. “Short-term raw material fluctuations may have some impact, which may be partially mitigated by continued volume pull.”

But, Investors were unimpressed as the company’s shares lost 2.5% on the NSE, despite a 1% decline in Nifty Auto.

Small cars are in focus again

Bhargava also noted that the government has realized the importance of this. Even if new regulations such as corporate average fuel efficiency (CAFE) III come into force in the next few years, small cars and the segment are now likely to make a comeback.

“I think the government has realized that the affordability of small cars is a very real issue that must always be kept in mind,” Bhargava said.

“I think there won’t be a situation in the future where sales will drop so drastically in this segment because the government has realized that this is bad for a lot of people,” he added.

The share of small cars, which accounted for almost half of the total market in 2019, fell to about a fifth of the market by the end of fiscal 2026, according to Siam data.

Earlier, the company had warned that stringent new regulations such as the Cafe-III norms could threaten the viability of small cars in the country if the targets are not relaxed. Although the final norms have not yet been notified, a draft circulated to the industry earlier this month showed that small cars will receive more flexible targets than previous drafts.

This comes as the company prepares to meet demand for its small car range. Of the nearly 190,000 outstanding orders from customers at the end of FY26, 130,000 were for small cars falling within the 18% GST bracket defined by the government, the company said on Tuesday.