Rajendra Kumar Srivastava, Annabel Dsouza and Aman Rajeev Kulkarni Write: Can Maruti Reinvent Itself for India’s Next Mobility Wave? 

The promise of the future is frequently overshadowed by the weight of legacy. History demonstrates that great leaders and businesses fail because they cling too tightly to their past achievements, thus blurring their vision and ambition for the future.

After 40 years as India's top passenger-car brand, Maruti Suzuki India is currently at a similar crossroads. Although it still holds 40% of the overall passenger-vehicle market in India, Maruti’s share of the sports utility vehicle (SUV)/multi-purpose vehicle sales in 2024–25 was about 20% indicating serious room for innovation.

Shifting Gears

For a company with the unshakeable legacy of ‘affordable, reliable cars’ Maruti needs to ask how its products can more closely align with the morphing Indian auto market, and more importantly, with the new age Indian consumer.

In the vast hinterlands of rural and semi-urban India, Maruti continues to be desired because of its no-frills product, affordability, fuel efficiency, but most of all, because of its vast service network with over 5,000 service touch points across the country.

However, with higher-than-average growth rates in urban India, especially among millennial and middle-income households, the battlefield for car ownership has changed, and how:

• Policy tailwinds: The September 2025 GST overhaul reduced taxes on SUVs to 40%, maintained EVs at a favourable 5%, and reduced taxes on small cars from 28% to 18%. By lowering sticker prices by about 12%, this could increase demand and alter the economics of SUV and EV ownership, perhaps encouraging Maruti owners to migrate up-market.

• New fuel grades: The latest push for E20 fuel (20% ethanol blend) offers auto manufacturers the opportunity to create new fuel-grade compliant vehicles for the future. More than 80% of new cars in Brazil can run on high ethanol blends (up to 45%). However, increasing ethanol content to the 40% range will require modifications in engine design. We must learn these design nuances from Brazil, not Detroit, Stuttgart or Kyoto.

• EV benchmark: China, which now accounts for over 50% of global EV production, captured 35% of its new car sales with aggressive mandates, subsidies to drive battery and motor research, and charging rollouts. Compare that with less than 10% share of EV sales in India. Will the Indian market embrace the more flexible hybrids, giving Maruti a leg-up?

The company needs to rethink its innovation strategies to include AI-powered cost-competitive supply chains and customer experience. It must focus on product innovation and increase manufacturing capacity.

If there is one thing we have learnt from the rise of Tata Motors, Mahindra, Hyundai, Kia and MG Motors in the aspirational SUV and EV segments, it is this: today’s customers desire futuristic design, high-end features, digital integration and robust safety credentials.

Living in the Past

And here, Maruti's legacy could soon become its limitation, as shown by leaders of the past. One can learn from Hindustan Motors’ uninterrupted 50-year production of the Ambassador Mark I through Mark V. That iconic brand is now resting in peace.

Once the biggest phone manufacturer in the world, Nokia missed the smartphone trend and lagged Android and Apple competitors. BlackBerry ignored customer demand for apps, multimedia and a sleek design in favour of protecting its stronghold on corporate email.

In 1975, Kodak created the first digital camera but shelved it to preserve profits from selling and processing films. This cost the company its future, while its peers like Fujifilm reinvented by branching out into chemicals and health care.

A favourite corporate cliché is that the future belongs to those who create it. Alongside my colleague Francis Kim, faculty at Sassin School of Management, we developed the concept of ‘backcasting’ as against forecasting. Here you boldly imagine the future and work backwards to make it happen. How can you create the future without imagining and iterating upon it today?

Maruti must challenge itself and invest to lead design and innovation, scale and efficiency.

What may some of these bold decisions entail?

• Boost EVs, hybrids and clean tech: Maruti must not limit itself to merely launching sturdy products but collaborate with peers to drive demand for hybrid, electric and biofuels-based vehicles and take advantage of its extensive distribution and service network.

• Win the aspirational and SUV markets: India's growth engine is SUVs, hybrids and EVs. Maruti needs to provide bold designs, rich features, connected technology and high safety ratings in addition to cost efficiency. Here the company ought to relook at its in-showroom customer experience across the country, not merely through the premium Nexa outlets.

Rethink transportation beyond cars: Experience is a critical component of mobility. In-car digital ecosystems, subscription services and predictive diagnostics through apps can transform Maruti from a manufacturer to a lifelong mobility partner by digitally monetising after-sales and passenger experiences like clubbed subscriptions to lifestyle products.

Brand repositioning: Maruti needs to change its image from ‘India's affordable carmaker’ to ‘India's smart mobility leader’ to ‘Design in India but Make for the World’. This entails sustainability, design leadership and a greater understanding of the goals of young India.

Businesses that mistake size for strength have a harsh history. BlackBerry, Kodak and Nokia all demonstrate how past performance can be the single largest obstacle to future relevance. With Maruti facing the future of mobility in India, will it seize the opportunity to shape this future or continue to fight for relevance as India’s low-cost automaker?

Srivastava is the Novartis Professor of Marketing Strategy & Innovation, ISB and former dean of the school

Dsouza is manager–content & communications at the ISB Centre for Business Innovation

Kulkarni is a research associate at the ISB Centre for Business Innovation