Image Source: motorbeam.com
Despite the ongoing contraction in the small and affordable car segment in India, Maruti Suzuki, the country’s largest automaker, remains dedicated to serving budget-conscious consumers. As many car manufacturers exit this space, Maruti Suzuki reaffirms its commitment to affordable vehicles.
Chairman RC Bhargava emphasized in the company’s annual report, “Even as we focus more on producing SUVs and higher-cost vehicles for different market segments, we will never forget the needs of those who cannot afford expensive cars.”
The share of entry-level vehicles, which was around 33 percent in 2015, has plummeted to less than 1 percent of total sales. This drastic decline reflects the broader trend within India’s automotive market, where SUVs now dominate, accounting for approximately 50 percent of industry volume.
The decline in the small car segment has been exacerbated by rising vehicle costs, which have increased disproportionately compared to income growth. This trend has squeezed budgets and pushed many small cars beyond the reach of average consumers.
As most car companies shift their focus to higher-margin SUVs, Maruti Suzuki remains steadfast in its support for the entry-level segment. Bhargava is optimistic about a recovery in this segment next year, attributing this to potential improvements in affordability. He believes that the growth of small cars is vital for the overall expansion of India’s passenger vehicle market, as it attracts first-time buyers.
Maruti Suzuki recently revitalized the hatchback segment with the launch of a new version of its popular Swift. Managing Director and CEO H. Takeuchi noted, “As a market leader, we took on the responsibility to re-energize the hatchback segment when it needs a catalyst for growth.”
In 2023-24, India’s passenger vehicle volumes reached a record high of 4.2 million units, maintaining its position as the third-largest car market globally. However, industry growth has been slowing and is expected to continue moderating. Takeuchi highlighted the potential for future growth, noting that only 3 percent of Indians own cars. He stated, “My mission is to deliver the ‘joy of mobility’ to as many Indians as possible.”
Maruti Suzuki is also enhancing its SUV offerings as it strives to regain a market share of over 50 percent.
