No, Maruti Will Not Stop Making Small Cars Like Alto, S-Presso; But Admits That Demand Has Drastically Reduced

Chairman of Maruti Suzuki, RC Bhargava has cleared the air around the rumors which stated that the car maker shall stop manufacturing small cars due to increased cost.

The Chairman said, while dismissing the rumor, that the company remains fully committed to the customers of these small vehicles.

He quoted the Union road transport minister Nitin Gadkari, who said that minimum of six airbags will be mandatory for vehicles that can carry up to eight passengers.

He said that “This means that the entry-level cars and hatchbacks are out of the purview of this proposed regulation. Whenever the same is notified, it would not affect Maruti in any way”.

He added that the entry-level and premium hatchbacks are five-seater vehicles. 

From January 2022, for all cars selling in India dual front airbags have been made mandatory by the Union government.

However, when it comes to the mandatory six airbag rule, the process is ongoing.

Market for Small Car is Shrinking

Bhargava said it though the market share for small car segment is currently as 40%, the sale of the small car segment is shrinking for the last three years.

Due to the increasing costs, he said, the small car market is already shrinking.

The middle-class people, who are mostly first-time car buyers and see these cars as their first upgrade from a two-wheeler find these small cars massively expensive due to recent increased prices of small cars. 

Giving the analogy, he said that while the small cars happened to be the bread and butter for carmakers, the butter has gone and only the bread is remaining now.

Decreased Maruti Suzuki Share

In the FY22, the market share of Maruti Suzuki has declined to 43.4 per cent. The shift and the decline can be attributed to the decrease in interest in small cars and the arrival of more compact and midsize SUVs from rival carmakers.

The automaker said that due to the rising costs because of multiple reasons, the small car segment is facing a slowdown and in the light of such decline, adding the mandatory side and curtain airbags will only aggravate the market by further increase in costs. 

This may lead to loss of jobs in the auto sector and difficulty for two-wheeler owners in upgrading to four-wheelers.