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Small Car Market Shrinking In India Cause Of Concern For Maruti Suzuki

The entry-level segments have declined by 25 percent in the last 4 years.
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By car&bike Team

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1 mins read

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Published on April 29, 2022

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Highlights

  • Entry level segments declined 25 percent in last 4 years
  • Annual hatchback sales have shrunk by 4 lakh units in 4 years
  • Maruti total market share at 43.4 per cent

Maruti Suzuki has been at the zenith of the automotive industry and that has been thanks to the small cars that it has produced over the years. However, at the company's financial results, the company expressed concerns about the shrinking of the small car market. Now, to just give you a perspective on what small car means, we are talking about the entry level segments where hatchbacks like the Alto, S-Presso, Swift have made a significant impact. However, there has been a 25 per cent decline in the market in the last 4 years. Speaking to the media during the announcement of the financial results, RC Bhargava, Chairman, Maruti Suzuki, “In FY18-19,sales in the hatchback segment were 15.5 lakh units, but now in FY21-22, it has shrunk to 11.5 lakh units and that means a massive reduction of 4 lakh units in just 4 years and that's massive and that has certainly hurt Maruti Suzuki.”

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Declining consumer interest in the small car segments has hit Maruti Suzuki's volumes. The segment has shrunk by 4 lakh units in just the last four years.

During the same period, the SUV segment showed a good growth, but not a significant one. Bhargava said that the SUV segment has grown from 18 lakh units to 19 lakh units during the same period of 4 years and though it's a growth, it's just a 6 per cent growth and that's marginal. The sedan segment too has gone down and this is the reason why the company rerouting its investment to ensure that it is present in the segment, where there is more demand and that's why we will see more SUVs coming into the market from Maruti Suzuki. Will we see the Jimny make its way to India? Is there a Creta/Seltos/Astor rival in the making?

Well, none of these questions were answered by the company as it said, “We do not discuss our future plans for upcoming products” but yes, there will be more SUVs in the company's portfolio going forward. And the company needs it because, if you see the market share of the company during FY21-22, without the contribution of SUVs, Maruti Suzuki boasted of a market share of 65 per cent, while counting SUVs, which basically means overall market share, stood at 43.4 per cent. Clearly Maruti Suzuki is missing out on a big piece of the pie, which it plans to correct in the upcoming financial year.

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