India’s automobile industry is entering a decisive expansion phase, with carmakers collectively lining up investments of nearly Rs 1 lakh crore over the next 5-6 years. The capacity build-up comes on the back of GST (goods and services tax) rationalisation, which, industry leaders say, has provided the policy clarity and demand visibility required for long-term production planning.
From a current production capacity of around 5.5 million passenger vehicles annually, Indian carmakers are preparing to scale up to nearly 9 million units per annum — a 65 percent increase, or an additional 3.5 million units.
Industry executives believe the GST-driven momentum will not be short-lived. “The GST boost is not just for one month or one quarter. This is going to help keep the demand momentum up for the upcoming years,” said the President of the Federation of Automobile Dealers Association, on February 10.
Maruti Suzuki to add 1.5 million units by FY30
Market leader Maruti Suzuki India is leading the expansion wave as it works to defend its market share, which has faced pressure in recent quarters.
The company plans to add 1.5 million units of annual capacity between FY27 and FY30 — more than half of its current total output. Maruti’s present installed capacity stands at 2.6 million units per annum.
A significant portion of the expansion will come from a new greenfield plant in Gandhinagar, Gujarat, with a planned capacity of 1 million units annually. The project will involve an investment of approximately Rs 35,000 crore.
The aggressive capacity build-up underscores Maruti’s intent to strengthen its position amid rising competition.
Toyota Kirloskar Motor targets 1 million capacity
Bengaluru-based Toyota Kirloskar Motor is also embarking on a major expansion as it plans to enter the league of India’s top three carmakers.
Toyota is understood to be doubling its capacity in India, targeting 1 million units per annum. In addition to a 100,000-unit expansion at its Bidadi plant in Karnataka, the company is planning a significantly larger facility at Chhatrapati Sambhajinagar in Maharashtra.
The upcoming plant will support export ambitions, leveraging proximity to the Mumbai port.
Some of Toyota’s key models — including the Toyota Fortuner and the Toyota Innova — are currently witnessing waiting periods, reflecting strong demand. The additional capacity will help reduce delivery timelines while accommodating new product launches.
Under its partnership with Suzuki Motor Corporation, Toyota also sources select models manufactured by Maruti Suzuki for rebadged sales in India.
Mahindra & Mahindra nears capacity doubling
SUV heavyweight Mahindra & Mahindra has unveiled its largest-ever production enhancement plan. The company will add a 500,000-unit plant in Nagpur and a 240,000-unit facility at Chakan.
From an exit-FY26 capacity of 774,000 units, M&M is set to scale up to more than 1.5 million units annually by FY29–FY30.
The additional capacity will support an upcoming range of compact SUVs scheduled for launch in 2027, as Mahindra strengthens its position in India’s fast-growing SUV segment.
Tata Motors expands Tamil Nadu footprint
India’s second-largest carmaker, Tata Motors, is pursuing a comparatively measured expansion strategy.
The Mumbai-based automaker is setting up a new facility in Tamil Nadu with an investment of Rs 9,000 crore and an annual capacity of 250,000 units. Its existing facilities, currently producing between 850,000 and 900,000 units per year, can be stretched to around 1 million units annually.
Tata Motors is expected to use the added capacity to strengthen its presence in electric vehicles and next-generation SUVs.
JSW MG Motor bets on EV and hybrid growth
JSW MG Motor India is investing Rs 4,000 crore to nearly triple its production capacity to 300,000 units per annum.
The company has lined up multiple new products, including plug-in hybrid and electric vehicles.
MG has already emerged as India’s second-largest EV brand, and the expansion aims to consolidate that position amid accelerating electrification.
A structural shift in India’s auto Manufacturing landscape
The scale of investments reflects more than cyclical optimism — it signals a structural shift in India’s automotive ecosystem.
With improved tax clarity, sustained demand, and growing export ambitions, carmakers are preparing for a larger domestic market while positioning India as a global manufacturing hub.
If all planned expansions materialise on schedule, India’s passenger vehicle production capacity will touch 9 million units annually within the decade — marking one of the most significant industrial build-outs in the country’s recent history.
