Maruti bets big on SUVs amid rising demand

Maruti Suzuki India is gearing up for a strong SUV push with at least six out of ten new models planned for the next three years starting FY25 being sports utility vehicles (SUVs), reinforcing the Japanese carmaker's strong intent to sharpen focus on the vehicle body type amid a rapid shift in buyer preference.

The new launches will expand the model line-up at the maker of Grand Vitara and Brezza SUVs to about 30, said people privy to the company's plans. This will be the first major step by Suzuki Motor's Indian subsidiary to double annual production to 4 million vehicles by the turn of the decade.

Through new SUV introduction and growing sales of existing SUV models, India's largest carmaker aims to sell 540,000-560,000 SUVs in FY26 compared with an estimated 440,000 units this fiscal.


A spokesperson for Maruti Suzuki said the company "doesn't give any guidance on future models."

Mirroring the strategy it once adopted in the passenger car market of straddling all segments with models at multiple price points, Maruti is likely to cover "all white space" in the SUV segment including micro SUVs, compact SUVs, and compact electric SUVs as well as two new four-metre SUV models, which will be pitted against Mahindra & Mahindra's bestselling XUV700 model, said one of the persons aware of the company's plans.

In the works are four EVs with the first set to be the company's debut electric SUV with an expected launch this October. To be positioned in the premium end of the market, the model is likely to be priced between ₹20 and ₹25 lakh. This will be followed by a seven-seater electric SUV in March 2025, a small EV in May 2026 and an electric MPV derivative of its maiden e-SUV in October 2026.

Maruti is also developing a micro-SUV, a small SUV and a three-row MPV that are likely to go on sale sometime in FY26 and FY27, said the people cited above.

Maruti is also preparing to launch a new generation Swift/Dzire, Fronx facelift and new generation Baleno in 2024, 2025 and 2026, respectively. Most of the models priced up to ₹12 lakh will also be offered with Suzuki's affordable hybrid technology which is currently under development.

"With electrification catching pace, all the new generation models from Maruti's existing lineup will have a hybrid option even as the company continues to pursue pure EVs," a second person said.

Share of SUVs in India's passenger vehicle market climbed to 53% in December 2023 from 44% a year earlier. Strong demand for vehicles with high ground clearance and high seating stance coupled with launches of new SUV models helped Maruti grow the share of SUVs in its overall sales to 25% in December 2023 from less than 10% two years ago. To be sure, except for the Jimny which was pitted against the Mahindra Thar and hasn't taken off, most of its new launches in the segment have added to overall volumes.

The higher share of SUVs has helped the company expand its average realization per unit and support margins despite rising discounts, showed ETIG analysis.

It has improved Maruti's average selling price by 6.6% to ₹6.6 lakh per vehicle. Consequently, the operating margin before depreciation and amortisation (Ebitda margin) expanded by 198 basis points to 11.7% even though the average discount per vehicle increased by ₹5,000 year-on-year to ₹23,300 in the December quarter.