Partho Banerjee and Rahul Bharti
In a month marked by geopolitical tension and shifting market dynamics, Maruti Suzuki India Limited (MSIL) reported total sales of 180,077 units in May 2025, including 138,690 units in the domestic market, 10,168 to other OEMs, and 31,219 units exported.
Even as overall retail sales mirrored the industry’s downward trend—contracting by around 4%—Maruti’s top-selling models, the Dzire, Ertiga, and Brezza, continued to lead the charts.
According to Partho Banerjee, Senior Executive Officer, Marketing and Sales, MSIL, a confluence of challenges—military action along sensitive border regions and a structural affordability crisis in the entry-level segment—has put pressure on demand. States like Jammu & Kashmir, Punjab, Rajasthan, and Gujarat, which together account for nearly 22% of the OEM’s sales, have seen a sharp drop in vehicle purchases. With tourism virtually paralysed in some pockets, the impact has been especially acute in cities that typically see a seasonal sales lift, he pointed out.
Compounding the situation is the rising cost of compliance with new regulations, which continues to erode affordability in the small car segment. The aspiration-led transition from two-wheelers to entry-level cars has faltered, slowing the natural expansion of the market base. While Maruti has made gains in higher-margin SUVs, MPVs, and sedans, the company sees this not as market growth but as an internal rebalancing of demand across segments.
Still, amidst uncertainty, Maruti’s performance has remained aligned with broader industry trends due to its deep-rooted presence, diversified portfolio, and agility in adapting to emerging challenges, he said.
Exports As A Strategic Lever
As domestic headwinds mount, MSIL has steered its decisive focus beyond boundaries—an approach that’s already paying off. While domestic wholesale sales declined by 2.6% in the April–May period, total sales including exports rose by a robust 5%, with exports alone surging nearly 80% in May and 50% over the two-month span.
This pivot reflects more than just a short-term response; it signals a long-term strategic hedge. “Our aggressive export strategy has been instrumental in counterbalancing domestic softness,” said Rahul Bharti, Executive Director, Corporate Affairs at Maruti Suzuki. “Exports are not just a volume play—they are a structural buffer that adds resilience to our business model,” he mentioned.
The company’s international footprint now spans over 100 countries, with strongholds in Africa, Latin America, and Southeast Asia. Notably, Japan—traditionally seen as an export destination for global majors—has swiftly emerged as Maruti’s second-largest overseas market. This growth is propelled by just two models, the Fronx and the Jimny, he said.
For the full fiscal year, the OEM is aiming for at least 20% growth in exports, confident in the strength of its diversified portfolio and expanding geographic reach. In an environment where domestic uncertainties persist, the company's ability to find traction abroad not only secures volume but affirms its growing stature on the global automotive stage.
Rare Earth Dependencies Under Watch
Even as MSIL expands its global footprint, the company remains watchful of developments that could disrupt future operations—particularly in the complex rare earth supply chain. These critical materials, essential for components like electric motor magnets, are now subject to heightened export scrutiny from China, the dominant global supplier.
Rahul Bharti, Executive Director, Corporate Affairs, acknowledged the shifting landscape. “China has mandated end-user certification for rare earth exports, a move that affects a range of industries, including automotive,” he noted. The Indian auto industry, including Maruti, is actively engaging with the government to ensure regulatory compliance. For now, operations remain unaffected. But the development underscores the vulnerability of global supply chains, especially for emerging technologies reliant on scarce inputs he said.
As Maruti deepens its presence in electric mobility and advanced powertrains, ensuring access to these materials will be crucial—not just for uninterrupted production, but for sustaining momentum in its technological transformation.
Looking Ahead
Despite short-term challenges, MSIL remains optimistic about the months ahead. According to Banerjee, the company is already seeing signs of latent demand—particularly among customers with finance approvals who have postponed deliveries, likely due to temporary geopolitical or economic concerns. This reservoir of deferred intent could translate into a sales rebound as conditions stabilise, he pointed out.
Adding to the optimism is a promising monsoon forecast. Given the vehicle maker’s entrenched position in India’s rural heartlands, a good monsoon typically translates into buoyant farm incomes and stronger demand for entry-level cars and utility vehicles. Historically, rural markets have served as a reliable growth engine for the company, and FY25 appears set to follow that trend.
Inventory levels, a key criteria of dealer confidence and retail momentum, have also improved. “We’re at a comfortable 35 days of inventory now,” Banerjee said, pointing out that this is a significant improvement over last year’s level.
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