Maruti Suzuki Is Concerned About India’s Shrinking Small Car Market

The entry-level segment has shrunk by 25% over the last four years.

Maruti Suzuki has been at the pinnacle of the automotive industry for decades, owing to the small cars it has produced. However, the company expressed concern about the shrinking small car market in its financial results. To put small car into context, we’re talking about the entry-level segments, where hatchbacks like the Alto, S-Presso, and Swift have made a significant impact. However, the market has declined by 25% over the last four years. RC Bhargava, Chairman, Maruti Suzuki, stated to the media during the financial results announcement, “In FY18-19, hatchback segment sales were 15.5 lakh units, but in FY21-22, they have shrunk to 11.5 lakh units, which means a massive reduction of 4 lakh units in just four years, which is massive and has certainly hurt Maruti Suzuki.”

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Maruti Suzuki
Maruti Suzuki

The SUV segment grew moderately during the same period, but not significantly. Bhargava stated that the SUV segment grew from 18 lakh to 19 lakh units over a four-year period, and while this is growth, it is only a 6% increase, which is negligible. The sedan segment has also declined in popularity, which is why the company has redirected its investment to ensure that it remains present in the segment with the highest demand, which is why we will see more SUVs from Maruti Suzuki. Will the Jimny eventually make its way to India? Is a Creta/Seltos/Astor rivalry developing?

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Maruti Suzuki
Maruti Suzuki

To be sure, none of these questions were addressed by the company, which stated, “We do not discuss our future plans for upcoming products,” but yes, the company’s portfolio will expand to include more SUVs in the future. And the company requires it because, in FY21-22, Maruti Suzuki boasted a market share of 65 per cent without the contribution of SUVs, while counting SUVs, which is essentially synonymous with overall market share, stood at 43.4 per cent. Maruti Suzuki is clearly missing out on a sizable piece of the pie, which it intends to rectify in the coming fiscal year.

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