Maruti Suzuki remains committed to small car segment, expects revival soon
Maruti Suzuki, India’s leading automobile manufacturer, is reaffirming its commitment to the small car market despite a recent decline in sales. Chairman R.C. Bhargava, addressing the company’s 43rd annual general meeting (AGM), indicated that the company expects a revival in the small car segment by the fiscal year 2025-26.
Bhargava stressed the importance of low-cost and small cars in India’s economic and social landscape. He remarked, “We firmly believe that low cost and small cars are necessary in our economic and social conditions. A temporary setback in demand is not going to change our strategy.”
The small car market has faced challenges recently, with Maruti Suzuki’s mini and compact segment vehicles seeing an approximate 12% drop in sales from April to July 2024 compared to the previous year. In contrast, the company’s utility vehicle segment experienced a 16.44% increase in sales over the same period. The successful launch of models such as the Jimny and Fronx in mid-2023 has contributed significantly to Maruti’s growth in the SUV sector.
Key small car models like the Baleno, Celerio, Dzire, Ignis, Swift and WagonR remain central to Maruti’s strategy, with pricing typically ranging between Rs. 5-8 lakhs. The company plans to bolster its small car lineup and expand its production capacity, with vehicles from the new Kharkhoda plant expected to support this goal.
Additionally, Maruti Suzuki is preparing to enter the electric vehicle market with its first all-electric model for India, the eVX. Production is slated to commence in January 2025 at the newly-acquired Suzuki Motor Gujarat plant. The eVX is expected to compete in the mid-size electric SUV market, with competitors including the Tata Nexon EV, the upcoming Hyundai Creta EV and the Honda Elevate EV.
Despite a 7.4% year-on-year increase in production during the first quarter of 2024-25, Maruti Suzuki’s sales grew only 1.2%, bringing the total to 4,27,000 units. The company, which holds a 40% share of the Indian car market, has not disclosed specifics regarding pending orders or unsold inventories. The slowdown is attributed to reduced consumer demand and increased dealer stockpiles. The Federation of Automobile Dealers Associations (FADA) reports approximately 7,30,000 unsold vehicles, while the Society of Indian Automobile Manufacturers (SIAM) estimates around 4,00,000 units.
Bhargava highlighted the company’s efforts to address inventory challenges and enhance its sales and service network, particularly in rural areas and small towns. This strategy is aimed at improving accessibility and aligning production processes with market demand to mitigate risks of overproduction or shortages.
Maruti Suzuki is also focusing on expanding its export segment, with expectations to surpass 3,00,000 units this year. The company plans to export its first batch of electric vehicles to Europe and Japan, with the Fronx model already shipped to Japan.
