RC Bhargava believes that the lower end of the auto market has been steadily shrinking over the last three years, mainly due to the rising costs
Maruti Suzuki, the largest carmaker in India, is the undisputed leader in the small car market in our country. However, the manufacturer has seen a significant decline in its market share in the past few years, with its overall small car sales seeing a huge decline. RC Bhargava, chairman of Maruti Suzuki India Ltd, has stated the trend to be ”worrying”.
In a virtual earnings call conference, Mr. Bhargava pointed out that in 2021-22, around 11.5 lakh hatchbacks were sold in the Indian market, which is a little over 25 per cent drop compared to 15.5 lakh hatchback sales in 2018-19. He believes that at the lower end of the market, high vehicle costs are keeping potential new car buyers at bay.
Due to high taxes, stringent regulations, and expensive raw materials, automobile prices have gone up significantly in India in the past few years. The entry-level car segment and the two-wheeler market have been affected massively as a consequence. That said, the demand for new UVs continues to grow stronger, with SUVs driving the sales for most other automakers.
“What has happened is that the small cars used to be the bread and butter (but) I am afraid, the butter has gone away, now it’s only bread. There’s no butter left in the small car market anymore,” said RC Bhargava. He even stated that the entry-level car segment is losing sustainability, and there’s a low probability of that reversing in the near future.
That said, Maruti Suzuki is planning to take the challenge head-on. “We have to take note of what the customer wants and what the market is doing. As you are aware, we are launching vehicles in other segments and the bigger segments, also including the SUVs,” stated the chairman. The manufacturer is working on three brand-new SUVs, including a Baleno-based crossover, a new three-row SUV, and an electric SUV.
Other than that, the company will also be updating its existing SUV portfolio. Maruti Vitara Brezza is scheduled for a generation change very soon, and S-Cross is expected to be replaced by a new model later this year. Some of these models are being developed in partnership with Toyota, and the latter will launch them under its own brand as well.