Maruti Suzuki: Small cars will remain an important part of the Indian market, says Maruti Suzuki

A senior official at the country’s largest automaker said that small cars will continue to make up a large percentage of sales in the domestic market despite increasing consumers’ preference for more sports utility vehicles (SUVs).
With the Indian economy on a revival model and poised to grow among the fastest in the world, income levels are expected to rise, support first-time buyers in the mass market, and stimulate sales of small cars, Shashank Srivastava, Senior Executive Director (Marketing and Sales) at

for ET on Thursday.

“There is an inherent demand (for small cars) given our demographics. The average age in our country is 25. Up to 65% of car buyers are under 35 years old. He said on the sidelines of the launch of the new Alto K10, priced between 3.99 -5.83 rupees (showroom).

First-time buyers account for half of passenger car sales in the domestic market.
Srivastava said entry-level sales have been under pressure recently due to the increasing cost of vehicles on the back of higher taxes, commodity prices and improved regulatory requirements, along with consumer preference for additional features.

“Price increases as a percentage of the total cost of a vehicle in this segment have been higher,” he said. Due to the high sensitivity to price, the growth in this segment has not been much. But the demand is there. It’s up to the manufacturer to strike a delicate balance, deliver value, and spark demand.”

As many as 550,000 entry-level hatchbacks were sold in the country last year. Maruti Suzuki dominates this space with a market share of 88%. “The absolute volumes in this segment are large even in comparison to SUVs. The top four selling models are still hatchbacks,” Srivastava said.

SUVs were the best-selling SUV in the Indian auto market last fiscal year with sales of 1.23 million units compared to sales of 1.15 million hatchbacks.

Srivastava admitted that the Alto – once the biggest selling car in the Indian market – had slipped to number four in the past few years, but said with the recent launch of the Alto K10, it is expected to reclaim center stage.

Up to 65% of Alto’s sales come from small towns. With the new Alto K10, Maruti Suzuki aims to increase sales from major cities as well.

Sure enough, with sales of 150,000 units last year, the Alto was ahead of SUVs like the Hyundai Creta, Maruti Suzuki Brezza and Tata Nexon in terms of size.

“India is a vast country with a diverse demographic,” said Maruti Suzuki, managing director, Hisashi Takeuchi. “Just like the cuisine and culture, customer requirements and preferences also change from place to place…While SUVs have certainly gained popularity in recent times, a large section of customers still prefer hatchbacks…As a market leader, we need to maintain The hatchback segment is racy with exciting products.”

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