Maruti Suzuki, India's largest, is requesting the government to take some action, as small cars in India are collapsing very quickly. Small cars, which were the pillar of the Indian automobile industry and the highly demanded entry-level hatchback, are now on their hands and knees as consumers, time and time again, keep moving toward SUVs and high-end vehicles.
Data from the industry suggests that small cars' market share in the Indian PV segment has declined quickly over the past few years. In FY16, the market for entry-level cars priced below ₹5 lakh amounted to approximately one million (934,538) cars sold. This is a far cry from FY25 with 25,402.
A Diminishing Market Share
The downward trend can also be seen in market share figures. In FY18, small cars had a share of 47.4% of the PV market, but that steadily declined to 27.7% share in FY24. It is worth noting that Maruti Suzuki still sells a large number of small cars, with models such as the Alto K10, S-Presso, Celerio, and WagonR, but they have seen numbers drop significantly as well.
May 2025 saw combined sales of the Alto K10 and S-Presso declined to 6,776 units, down from 9,902 units in May 2024. May sales of compact vehicles Baleno, Celerio, Swift, Dzire and Ignis led to a combined sales number of 61,502 units, down from 68,206 units compared to the previous year in May.
Maruti Suzuki Calls for Government Intervention
In a recent discussion, Partho Banerjee, Senior Executive Officer (Marketing & Sales) at Maruti Suzuki India, said that as regulations have increased and the government has made cost effective small cars less accessible to two-wheeler users who would like to upgrade to a four-wheeler, the need for government incentives to target small cars in making them more affordable.
Banerjee stated, "If the government wants to grow the automobile sector they need to understand the absolute requirement for expanding the base of four-wheeler consumers."
With economical options disappearing and demand evolving, small cars are now on the chopping block — and Maruti Suzuki is clear that the solution lies with timely intervention from the government.
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