The country’s largest passenger vehicle manufacturer Maruti Suzuki India (Maruti Suzuki India) on Monday expressed concern over the continuous decline in demand in the entry-level car segment. It has requested the government to interfere with the helpful policies to promote this segment. The company says that due to the increase in strict rules and costs, the purchase of small cars is getting out of the reach of common consumers.
In FY16, where the sale of entry-level cars worth less than Rs 5 lakh was 9.34 lakh units, in FY25 it has come down to only 25,402 units. Now this segment is less than 30% of the passenger vehicle market.
Models like Alto and S-Presso affected
Sales of Maruti Suzuki’s popular entry models Alto and S-Presso declined to 6,776 units in May, which was 9,902 units in May last year. Compact segment cars such as Baleno, Celerio, Dzire, Ignis, SWIFT and WagonR also reduced to 61,502 units, which was 68,206 units in May 2024.
Two-wheeler upgrade to four-wheeler difficult
Partho Banerjee, Senior Executive Officer (Marketing and Sales) of Maruti Suzuki India, told in a virtual press conference that the prices of entry-level cars have increased significantly due to increasing regulation and safety norms. This has affected customers who want to go from two -wheelers to four -wheelers.
Banerjee said, “If the government wants the growth of the auto industry, then it has to understand where the real problem is. Some incentives are essential to increase the scope of the small car segment. There should be such incentives that can also buy the car that could not afford it till now.”
Decreasing stake in the market of small cars
The total passenger vehicle (PV) market of small cars in the market was 47.4% in FY18, which declined to 46% in FY19. In FY20 it increased to 46.5% slightly but after that there was a steady decline:
| FY (FY) | Stake of small cars |
| Fy18 | 47.40% |
| Fy19 | 46.00% |
| FY20 | 46.50% |
| FY21 | 45.60% |
| Fy22 | 37.50% |
| FY23 | 34.40% |
| FY24 | 27.70% |
There is no major impact on magnet supply from China: Maruti
The company said that the restrictions imposed on the export of Rare Earth Magnet by China at present have no immediate impact on Maruti Suzuki’s production. MSI Senior Executive Officer (Corporate Affairs) Rahul Bharti said that China has demanded an end-user certificate, which is necessary for the government’s approval. Negotiations between the industry and the government continue on this.
Target to export 4 lakh units in FY26
Maruti Suzuki has a target of exporting 4 lakh units in FY26, which is 20% more than FY25. In FY25, the company exported 3,32,585 units, indicating a growth of fY24 to 17.5%. In FY24, Maruti exported 2,83,067 units.
Bharti said, “Our export market has a lot of divers. Africa, Latin America and South-East Asia are our major markets. We have recently entered Japan and on the strength of only two models (Fronx and Jimny), this has become our second largest export destination.”
EV launch will get more speed
According to Maruti Suzuki, the launch of electric vehicles (EV) is yet to be increased, with its arrival, export will increase further. Fronx, Jimny, Baleno, Swift and Dzire were the top export models in FY25. At the same time, the top 5 markets include South Africa, Saudi Arabia, Chile, Japan and Mexico.
Bharti said, “Our export market share was 43% in FY25 and we are very close to the golden mark of 50%.”
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