The entry-level four-wheeler segment witnessed an all-time low in CY 2023. Even though the sales in this division have been plunging in the last five years, the premium hatchback now has a lion’s share. This mini hatchback class consists of the Maruti Suzuki Alto, S-Presso and Renault Kwid. The proof is in the puddling as the country’s number one automobile manufacturer decided to pull the plug on the highest-selling car in India, the Alto 800, in 2023 after introducing its new-generation version barely eight months earlier.
At that time, Shashank Srivastava, Senior Executive Officer, Marketing and Sales, Maruti Suzuki India Limited explained that due to the declining volumes of the entry-level hatchback segment, it wasn’t financially viable for the company to update the Alto 800 to the BS6 Phase 2 emissions, which came into place in April 2023. Fast forward to 2024 and the dismal sales numbers of this hatchback segment prove that Maruti Suzuki made a wise decision in halting the production of the Alto 800. Does this mean that this is the beginning of the end of the entry-level four-wheelers? We speak to Srivastava and get his insights.
Maruti Suzuki: Expect revival for entry-level vehicles
The hatchback segment has shrunk to 30 per cent and the entry-level class only constitutes 34 per cent. This is the lowest ever in Indian automobile history. Companies have tried every trick in the book to revive the sales numbers with heavy discounts, but the data clearly shows that customers are overlooking this segment as there’s a 37 per cent sales decline. We asked Srivastava whether this was the end of the road for the mini segment. He explained that realistically the company doesn’t see a revival this year, but signs of stabilisation could be seen after two years. “We suggest that in the second half of 2026 is when you could probably see a revival of this segment.” He further explains, “The demographic of India supports this as 65 per cent of the country’s population are below 35 years of age. In our growing economy, irrelevant of the income, there’s both a requirement for personal transportation and affordability aspect.”
Last year, we reported that R C Bhargava, Chairman, Maruti Suzuki India said, “Without the growth of entry-level segment, having sustained growth for car market is highly unlikely.”
Maruti Suzuki: The SUV segment is the key
Currently, the SUV segment constitutes almost 50 per cent of the entire market share. Maruti Suzuki has taken massive steps in this segment having an 11 per cent share last year to now almost doubling it to 21 per cent. A major contribution to this success is the Fronx, which achieved 100,000 sales volumes in 10 months, making it the fastest vehicle in India to reach this landmark figure in any segment. Maruti Suzuki believes that the SUV segment will play a crucial role for them to achieve its long-term goal which is to have a 50 per cent share of the entire market. “If we want to achieve a share of 50 per cent of the overall market, which is our long-term objective, then we have to increase our market share in SUVs. We have managed to double our market share in SUVs compared to last year but it is still short of our overall market target. Srivastava explains that Maruti Suzuki has a 65 per cent share in the non-SUVs division but to accomplish the 50 per cent market share target, they will have to attain 35 to 37 per cent in the SUV segment.
