Maruti Suzuki supply constraints intensify amid record Q3 demand

On January 28, 2026, Maruti Suzuki highlighted severe supply limitations even as it delivered record sales growth in the third quarter of FY2026. Dealer network inventory declined to just three to four days, while pending orders rose sharply to around 175,000 vehicles, underscoring the widening gap between demand and available supply.

Maruti Suzuki supply constraints driven by GST-led demand surge

The current pressure on supplies follows a sharp rise in vehicle demand after the Government announced GST tax reforms in August 2025, reducing taxes by 5–10%. The policy change triggered accelerated purchases across segments, forcing Maruti Suzuki to operate plants on Sundays and holidays to support volumes. Management clarified that the challenge is not weak demand but limited availability of components and production capacity. Despite maximum operational efforts, supply chain constraints continue to restrict the company’s ability to fully capitalize on market momentum.

Inventory stress reflects sustained production pressure

Even with continuous plant operations, inventory levels remain at critically low thresholds. A three to four-day stock position indicates near-peak utilization, suggesting that supply tightness is likely to persist in the near term despite aggressive manufacturing schedules.

Capacity expansion timeline and demand sustainability outlook

To address the imbalance, Maruti Suzuki advanced its expansion plans in August 2025, targeting an additional 500,000 units of annual capacity within twelve months. The Kharkhoda facility is expected to contribute 250,000 units by April 2026, followed by a similar addition from the Gujarat D-line. Management plans to reassess supply constraints over the next three months. Q3 volumes included postponed demand from the first half of the year and preponed purchases from Q4 and FY2027, indicating that demand levels may normalize once the GST-led boost stabilizes. Despite rising input costs linked to precious metals and rare earth elements, the company has refrained from increasing vehicle prices, citing ethical considerations in light of the government’s tax reduction initiative.