Maruti Suzuki Chairman predicts small car market revival by 2026
Maruti Suzuki chairman RC Bhargava has expressed optimism regarding the potential revival of the small car market in India by 2026. This projection comes amidst a period of decline for the small car segment, which has seen a decrease in sales while SUVs have been driving growth in the passenger vehicle industry.
During the fiscal year 2024, the Indian passenger vehicle market experienced its highest ever sales, primarily fuelled by SUVs, while small cars faced a 12 percent decline in sales. This decline has led to a reduction in the share of small cars in overall vehicle sales, dropping to 27.7% from 34.4% in FY23 and 47.4% in FY18. Maruti Suzuki, a dominant player in the small car segment, has been diversifying its portfolio to include more SUVs in response to the shifting market demand.
Bhargava attributes the potential turnaround of the small car market to rising income levels among entry level consumers and a gradual transition from two-wheelers to entry level cars. Despite the current downturn, he remains optimistic about the long term prospects of the segment, emphasising that the aspiration of prospective buyers still lies in owning a car, regardless of its classification as an SUV or a small car.
However, several factors have contributed to the challenges faced by the small car segment, including increased input costs, insurance charges, road taxes and compliance with emission and safety norms. These factors have led to price hikes, further impacting demand in both the small car and two-wheeler segments. Additionally, some OEMs such as Nissan, Honda and Volkswagen have opted to withdraw from the small car market in recent years, reflecting the complexities and challenges present in this segment.
Looking ahead, while Bhargava’s prediction offers a glimmer of hope for the small car market, it is essential to consider the broader market dynamics and challenges that continue to shape the automotive industry in India. As consumer preferences evolve and economic conditions fluctuate, the future trajectory of the small car market remains uncertain, with various factors influencing its potential revival by 2026.
