Maruti Suzuki seeks govt support to rescue ailing small car segment. Know more

Hindustan Times

2 days ago

Maruti Suzuki is pitching for government intervention to revive the small car segment in the Indian passenger vehicle market. Notify me
Small cars or hatchbacks have been the backbone of the Indian passenger vehicle market for a long time. In recent times, the small car segment has been witnessing immense pressure from the rising demand and sales of utility vehicles, especially SUVs and crossovers. This has pushed the small car segment down drastically. Maruti Suzuki, being the biggest car manufacturer in India, has always had a large pool of small cars. Even now, Maruti Suzuki holds the biggest chunk of the small car segment with its models like Alto K10, S-Presso, Celerio, WagonR, Ignis, etc.
The small car segment, which had once dominated the Indian passenger vehicle market, has recorded a gradual decline with the affordability factor coming into play and currently accounts for less than 30 per cent at present. PTI has reported that entry-level cars priced below ₹ 5 lakh, which used to be around a million units (934,538 units) in FY16, have declined to just 25,402 units in FY25. In the hatchback segment, consumer preferences are changing in favour of premium hatchbacks, which sit at the top end of the segment. In such a situation, Maruti Suzuki is seeking the government's support to rescue the small car segment.
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Maruti Suzuki saw sales of models like Alto K10 and S-Presso decline to 6,776 units in May 2025 as against 9,902 units sold in the same month last year. Even the sales of compact cars, including Baleno, Celerio, Dzire, Ignis, Swift, and WagonR, dropped to 61,502 units last month as compared to 68,206 units in May 2024. This has propelled the OEM to pitch for government help to revive the segment. In fact, earlier as well, Maruti Suzuki has advocated for revival in this segment to boost overall passenger vehicle sales in the country.
The share of small cars in the overall PV market in India was 47.4 per cent in FY18 and 46 per cent in FY19. In FY20, it improved marginally to 46.5 per cent and has been on a decline since. In FY21, it was 45.6 per cent, 37.5 per cent in FY22, 34.4 per cent in FY23 and 27.7 per cent in FY24.
Maruti Suzuki India Senior Executive Officer (Marketing & Sales) Partho Banerjee told reporters in a virtual press conference that with enhanced regulation, prices of small car models have increased significantly, impacting the buyers who want to upgrade from two-wheelers to entry-level cars. "So somewhere the government has to understand that if they want to fuel the growth of the auto industry, they need to understand where the problem is and how to increase the size of the pie (small car sales)," he noted, while adding, 'Some incentives are required so that the customer who is not able to afford the car can come in and can migrate to a four-wheeler from a two-wheeler."
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First Published Date: 03 Jun 2025, 09:57 AM IST