Small cars will stay major part of India mkt: Maruti Suzuki

Maruti Suzuki India Ltd, the country’s largest carmaker, expects the small or entry-level car market to remain a major part of the domestic market and a strong bet for the company despite dwindling sales of such vehicles.

R.C. Bhargava, chairman, Maruti Suzuki, said in an interview that the automaker will play a major role in the ₹5 lakh car segment in the coming years, even as its rivals vacate the market where volumes have halved as a percentage of total auto sector volumes over the last three years.

While a total of nine new SUV models are expected to be introduced this calendar year, there is not a single launch of a new small car model planned, barring two refreshes, including Maruti’s Alto K10 at a starting dealership price of ₹3.99 lakhs.

Bhargava, however, termed the downturn in the entry-level car segment as temporary.

“I’m confident that this downturn in the small car market is a temporary phenomenon. I believe in the long term, this market cannot be kept down - it has to grow, otherwise India will not grow. And what will happen to make it grow is per capita incomes have to go up, and maybe some way, the prices have to come down. But there is no way that the country can ignore this large-sized market and not allow them the benefits of growth in the country,” Bhargava said.

He said the small car segment has been hit hard due to increasing prices, impacting customer affordability.

“In the last three years, the lower end of the market has been hit the most because the percentage increase in price of cars has been maximum at that level. Cars below ₹5 lakhs have almost halved in terms of the percentage share in the total market. It’s not because the customers are not there. The nearly 230 million scooter customers are very much there. That’s the source of the under five lakh car customer. But because of the price increase, that segment of the market has not been able to even buy a five lakh car. So that market is shrinking in terms of total volume”, he said.

Hatchbacks make up nearly 38% of the passenger vehicle market in terms of sales volume with SUVs recently taking over as the largest PV segment at 40% share.

Maruti is also gearing up to regain market share it lost due to the lack of a competitive portfolio in the SUV category with as many as three new SUV launches lined up this calendar year and the next.

Its joint product offering with Toyota Motor, the Grand Vitara, will go on sale in September and already has an order book of more than 30,000 vehicles.