With declining sales in the entry-level car segment, Maruti Suzuki is developing a new small car featuring CNG, mild-hybrid, and flex-fuel options. Aimed at first-time buyers, this model is crucial to the brand’s strategy to reclaim a 50% market share in India.
Maruti Suzuki’s Next Big Bet: Affordable, Fuel-Efficient Small Cars
Maruti Suzuki, India’s largest carmaker, is working on a new entry-level small car with CNG, mild-hybrid, and flex-fuel powertrain options. With sales of popular models like the Alto, S Presso, and Celerio slowing down, the company is aiming to revive the small car segment and regain its lost market share.
This upcoming car will cater to budget-conscious buyers, particularly those earning between ₹5 lakh and ₹13 lakh annually, offering an affordable and fuel-efficient mobility solution.
Why Maruti Suzuki is Betting Big on a New Small Car
The Indian small car segment has witnessed a slowdown in recent years due to rising costs and shifting consumer preferences toward SUVs. However, Maruti Suzuki’s top management believes that small cars still have a future, especially given India’s massive two-wheeler market, which continues to be a key source of first-time car buyers.
Suzuki’s President Toshihiro Suzuki recently emphasized that while small car sales have declined, the demand remains strong. He pointed out that one billion potential customers in India still rely on two-wheelers and will eventually look for affordable four-wheelers.
To counter the declining trend, Maruti Suzuki’s Mid-Term Management Plan includes rapid development and introduction of entry-segment products tailored to market needs.
Challenges in the Small Car Market
One of the biggest hurdles for small car sales is the rising acquisition and running costs. Over the years, increased safety and emissions regulations have led to price hikes, making budget-friendly cars less accessible to the target audience.
Stricter BS6 emissions norms have increased production costs.
Enhanced safety features, like six airbags, have added to pricing pressures.
Slow income growth among first-time buyers has made affordability a major concern.
In response, Maruti Suzuki Chairman RC Bhargava has stressed the importance of affordable cars with exceptional fuel efficiency. He suggests that a car delivering 30-40 km per litre could be a game-changer in reviving demand in this segment.
The Role of Fuel-Efficient Powertrains
Maruti Suzuki has long dominated the factory-fitted CNG segment, and its upcoming small car will likely include a CNG variant. However, the company is now exploring mild-hybrid and flex-fuel technologies to provide more fuel-efficient and eco-friendly options.
CNG models continue to attract buyers looking for low running costs.
Mild-hybrid technology can improve mileage and lower emissions.
Flex-fuel engines will make cars compatible with ethanol-blended fuels, aligning with India’s push for alternative energy sources.
This strategy will help Maruti offer budget-friendly, fuel-efficient vehicles while meeting future emission regulations.
Affordability Matters: The Small Car Market in India
Currently, Maruti Suzuki’s Alto K10 (₹4.09 lakh) and S Presso (₹4.27 lakh) are among the most affordable cars in India. However, as most manufacturers have exited the sub-₹5 lakh car segment, the competition is shrinking, with Renault’s Kwid (₹4.69 lakh) being one of the few alternatives left.
Despite the industry shift toward SUVs, Maruti Suzuki remains committed to small cars. The company has made it clear that it will continue producing as many small cars as the market demands, ensuring affordability and efficiency remain priorities.
Looking Ahead: Maruti’s Strategy for the Future
Maruti Suzuki’s roadmap suggests that the new small car will arrive before FY2031, along with the company’s much-anticipated low-cost EV. Together, these models are expected to play a key role in Maruti’s growth strategy, particularly as it aims to reclaim a 50% market share in India.
With rising fuel prices and evolving emissions norms, a CNG, hybrid, and flex-fuel small car could be a game-changer in India’s entry-level car market. If Maruti can deliver high fuel efficiency at an affordable price, this upcoming model may bring first-time buyers back into showrooms and reinforce the brand’s dominance in the small car segment.
Also Read: