Maruti Suzuki FY27 capex hits ₹14,000 crore for capacity

What Maruti Suzuki announced

Maruti Suzuki India has earmarked a record capital expenditure of ₹14,000 crore for FY27, as it prepares to add manufacturing capacity amid rising demand. Chairman R C Bhargava said the company has reached close to 100% capacity utilisation at its existing facilities, leaving limited room to respond to order inflows without incremental lines. The plan was outlined during an earnings call, where management also addressed demand conditions and broader risks. The company’s capex estimate for FY27 is higher than any previous year, reflecting a heavier manufacturing investment cycle.

Why capacity is being added now

Bhargava linked the higher capex to capacity installation work at Kharkhoda in Haryana and the start of work at a new site in Gujarat. The company said it is effectively running its operations at full tilt to achieve sales of about 2.4 million units. Even with near full utilisation, Maruti Suzuki indicated it still has a backlog and very low inventories, highlighting supply constraints. Low dealer and company inventories typically mean dispatches track production closely, making capacity ramp-up a key lever for sales growth. The management commentary positioned FY27 investment as a response to demand that the company believes is continuing.

Two new lines: Kharkhoda and Hansalpur

Maruti Suzuki said it is adding two production lines at Kharkhoda (Haryana) and Hansalpur (Gujarat). These two lines together have a combined full capacity of 5 lakh (500,000) cars per year. Bhargava said the additional output will help the company meet demand, with particular reference to small cars. While the full rated capacity is 5 lakh units annually, the near-term contribution is expected to be lower because the lines have only recently started production.

What changes in FY27: phased ramp-up

Management expects that during FY27 these two lines will add roughly around 2.5 lakh (250,000) cars to production capacity as ramp-up progresses. In a separate update attributed to parent company Suzuki Motor Corporation, the second line at Kharkhoda is scheduled to begin operations in the first quarter of the next fiscal year, while the fourth line at Hansalpur is expected to commence in the second quarter. The same update noted that output will rise in phases rather than immediately reaching full capacity. Taken together, these statements suggest Maruti Suzuki is planning for a measured increase in supply through the year.

Current manufacturing footprint and installed capacity

Maruti Suzuki India currently operates four manufacturing facilities. These are located at Gurugram, Manesar, and Kharkhoda in Haryana, and Hansalpur in Gujarat. As per the PTI report, these facilities have a combined installed annual capacity of 24 lakh (2.4 million) units. With utilisation near 100% and inventories described as very low, incremental capacity becomes essential to reduce backlogs and support sales volumes.

Gujarat expansion: fifth facility at Sanand

As part of its capacity expansion strategy, Maruti Suzuki identified land in March 2026 for its fifth manufacturing facility at Khoraj Industrial Estate in Sanand, Gujarat. Once fully operational, the facility is expected to have an annual production capacity of 10 lakh (1 million) units. The company has said it will invest ₹10,189 crore to set up 2.5 lakh (250,000) production capacity in the first phase at this fifth plant. This places Sanand as a longer runway project alongside nearer-term ramp-up at Kharkhoda and Hansalpur.

Another Gujarat plant plan: investment and start timeline

A separate report cited a Gujarat government statement saying Maruti Suzuki will invest ₹35,000 crore in a plant planned in the state, adding production capacity of up to 10 lakh (1 million) vehicles a year. Production at that plant is expected to begin in financial year 2029, as per the same report. It also stated Maruti’s board approved an initial investment of ₹4,960 crore to acquire land for the plant. While these items relate to a longer timeline, they reinforce that Gujarat remains central to Maruti Suzuki’s manufacturing expansion plans.

Demand risks: management view on West Asia war

During the earnings call, Bhargava also addressed concerns around the West Asia war and its potential spillover into domestic demand. He ruled out any drastic impact on demand in India due to the conflict, based on the remarks carried in the report. The company’s capex plan and capacity additions were framed as aligned to continuing growth rather than a defensive posture.

Key numbers at a glance

Market impact and what to watch

For investors tracking the auto sector, the announcement puts production capacity and execution at the centre of Maruti Suzuki’s near-term narrative. The company is already operating at close to 100% utilisation with low inventories and backlog, which makes incremental line commissioning and ramp-up timelines important. FY27’s record ₹14,000 crore capex indicates a manufacturing-heavy year, while the Sanand land identification and longer-dated Gujarat plant plans extend the expansion pipeline beyond FY27.

The next checkpoints are the commissioning and stabilisation of output from the added lines at Kharkhoda and Hansalpur, and how quickly the incremental ~2.5 lakh units materialise during FY27. Separately, investors will track progress on the fifth plant at Sanand, particularly the first-phase 2.5 lakh capacity backed by the ₹10,189 crore investment plan, and the longer timeline indicated for production beginning in FY2029 for another Gujarat plant.