Maruti Suzuki Wants Government Support as Small Car Sales Decline Sharply
Maruti Suzuki Wants Government Support as Small Car Sales Decline Sharply
As small car sales continue to shrink in India, Maruti Suzuki India has sought government intervention to support the segment, citing affordability concerns and rising costs due to regulatory changes.
The contribution of small cars to the country’s overall passenger vehicle (PV) market has seen a significant drop over the years—from 47.4% in FY18 to just 27.7% in FY24. The decline is stark in the entry-level segment, where cars priced below ₹5 lakh have plunged from 9.34 lakh units in FY16 to a mere 25,402 units in FY25, now making up less than 30% of the segment.
Maruti Suzuki’s entry-level models like the Alto and S-Presso registered a sharp fall in sales, dropping to 6,776 units in May 2025 from 9,902 units in the same month last year. Compact car models such as the Baleno, Celerio, Dzire, Ignis, Swift, and WagonR also saw a decline, with sales slipping to 61,502 units in May 2025 from 68,206 units in May 2024.
At a virtual press briefing, Partho Banerjee, Senior Executive Officer (Marketing & Sales) at Maruti Suzuki India, highlighted the challenges faced by two-wheeler owners looking to upgrade to entry-level cars. “With rising regulatory costs, affordability is a major issue. The government needs to identify the pain points and consider offering incentives to boost small car sales,” Banerjee said.
On the global front, Maruti Suzuki clarified that China’s export restrictions on rare earth magnets have not immediately impacted production. Rahul Bharti, Senior Executive Officer (Corporate Affairs), said the Chinese government now requires end-user certificates approved by the Indian government. “The process is ongoing, and the industry is in discussions with the authorities,” Bharti noted.
Rare earth magnets, crucial for automotive and clean energy sectors, are mostly processed in China, which controls over 90% of global capacity.
Despite domestic market challenges, Maruti Suzuki is eyeing strong export growth. The company aims to export at least 4 lakh units in FY26, up 20% from 3.32 lakh units in FY25—a record figure reflecting 17.5% growth over the previous fiscal. Maruti currently holds 43% of India’s total vehicle exports and expects to approach the 50% mark this year.
Key export models include the Fronx, Jimny, Baleno, Swift, and Dzire, with South Africa, Saudi Arabia, Chile, Japan, and Mexico emerging as top international markets. “Our presence spans 100 countries, and Japan has rapidly become our second-largest export destination,” Bharti said, adding that upcoming EV offerings will further boost global numbers.
