Suzuki Motorcycle India tempers FY27 growth forecast due to West Asia conflict, rising costs

Suzuki Motorcycle India Ltd (SMIPL) has revised its domestic two-wheeler sales growth estimate for FY27 downwards, citing the impact of rising commodity costs due to the ongoing West Asia conflict and its potential effect on consumer affordability.

Domestic two-wheeler sales growth at Suzuki Motorcycle India Ltd (SMIPL) is likely to remain below the earlier 7-8 per cent estimate in 2026-27 (FY27), as strong underlying demand is tempered by rising commodity costs due to the ongoing West Asia conflict, its vice president (sales and marketing), Deepak Mutreja, said on Thursday.

SMIPL reported a 12 per cent increase in domestic sales to 1.174 million units in FY26, compared to 1.045 million units in the previous fiscal year, reflecting a recovery in demand, driven largely by policy support in the second half.

Impact of Global Disruptions on Growth

However, the macroeconomic environment has turned volatile.

Israel and the United States (US) attacked Iran on February 28, triggering a fresh conflict in West Asia.

In response, Iran shut the Strait of Hormuz, a key route for global oil and gas supplies, pushing up fuel and commodity prices and stoking inflationary pressures worldwide.

Speaking to Business Standard after the launch of the company's new Burgman Street scooter, Mutreja said his firm in early 2026 projected a 7-8 per cent growth for FY27 but was now turning more cautious.

He pointed out that while demand fundamentals remain intact, external disruptions are making it difficult to provide a firm outlook.

"The growth momentum should continue, but we are not insulated from global disruptions," he said, adding that supply chains and input costs are increasingly vulnerable to rising fuel prices.

"We had estimated 7-8 per cent growth earlier, but it could moderate. We will have to assess the situation quarter by quarter," he added.

Affordability Concerns and Price Adjustments

Mutreja highlighted that the two-wheeler market was closely linked to "affordability", even if the "need" for mobility remained strong.

He noted that inflation, which was relatively benign at around 1.5-2 per cent last year, is now expected to rise to 3-4 per cent due to escalating global costs.

This, he said, could alter consumer spending priorities.

"Need is still there in the market, but affordability is the key factor...

"With inflation moving up, priorities of consumers may change," he said.

He also talked about the pressures at both household and corporate levels, citing higher liquefied petroleum gas (LPG) costs for consumers and increased input costs for manufacturers.

LPG is a key raw material for automobile and auto component makers.

Monitoring Supply Chains and Future Strategy

On the operational front, Mutreja said the company was closely monitoring the evolving situation, particularly the impact on supply chains.

While production has not been affected so far, the level of uncertainty has increased.

"Earlier, we had visibility of supply pipelines for up to a quarter, but now we are monitoring on a weekly basis," he said.

"As of now, production is not impacted, but we are observing the situation very carefully," he added.

Commodity prices, which had already been rising before the conflict, surged further in recent weeks.

The company has responded with calibrated price hikes. Mutreja said Suzuki Motorcycle India had increased prices for some models on January 1 and implemented another round of hikes on April 1 to partially offset input cost pressures.

The comments came as the company unveiled the updated Burgman Street, its premium 125cc scooter, marking the next phase of its product strategy in India.

Mutreja indicated that while product launches and network expansion will continue, managing cost pressures and demand sensitivity will be critical in the coming quarters.