Entry segment contribution rises from 16.7% pre-GST as Alto, S-Presso, WagonR, and Celerio witness remarkable revival in customer demand.
03 Nov 2025 | 1478 Views | By Arunima Pal
Maruti Suzuki's entry car segment has staged a dramatic comeback, with Alto, S-Presso, WagonR, and Celerio collectively jumping to 20.5% of the company's retail sales portfolio after the GST reduction—up sharply from 16.7% during the April-September period, Executive Director Partho Banerjee revealed.
"From April to September, in the pre-GST ...
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Maruti Suzuki's entry car segment has staged a dramatic comeback, with Alto, S-Presso, WagonR, and Celerio collectively jumping to 20.5% of the company's retail sales portfolio after the GST reduction—up sharply from 16.7% during the April-September period, Executive Director Partho Banerjee revealed.
"From April to September, in the pre-GST era, the contribution of entry cars retail sale in our portfolio was 16.7%. And now, after the GST 2.0, it is 20.5%. It's a huge number," Banerjee stated at the company's Q2 and H1 financial results press conference, characterizing the shift as significant.
The 3.8 percentage point increase represents thousands of additional vehicles monthly and signals that India's most affordable car segment—which had faced existential questions amid the broader market's premiumization trend—has found renewed relevance following the government's tax intervention.
The entry car revival centers on four models that have been mainstays of Maruti's lineup for years, each targeting slightly different customer needs within the affordability-focused segment. The Alto and S-Presso represent the minicar category, while the WagonR and Celerio offer slightly more space and features while remaining accessible to first-time car buyers.
Chairman R C Bhargava attributed the segment's previous decline entirely to affordability constraints rather than changing aspirations. "Households earning above ₹15 lakh a year form only about 10-12% of the total population. The remaining 85% have much lower income levels," he noted, explaining why entry cars remain essential for the vast majority of potential buyers.
During October's festive period, the minicar segment—comprising Alto and S-Presso—contributed approximately 70% of sales growth, according to Bhargava. This outsized contribution from the entry end of the portfolio represents a remarkable reversal from recent years when these models were often dismissed as legacy products with limited future prospects.
The segment's resurgence is particularly evident in showroom dynamics. Banerjee described an unusual new indicator: "Nowadays, we are counting the number of helmets in our showroom. In all our discussion tables, we find there many helmets are lying. These are the first new type of customers who are coming, thetwo-wheeler customers who want to upgrade to a four-wheeler."
These helmet-carrying customers represent precisely the demographic that entry cars were designed to serve: households taking their first step into four-wheel mobility, transitioning from motorcycles and scooters to the safety and convenience of enclosed vehicles.
The transition is being facilitated by innovative financing schemes Maruti is developing specifically for two-wheeler upgraders. "We are working on very innovative finance schemes that you can upgrade at a very reasonable price, because everybody aspires to have a four-wheeler," Banerjee explained.
The geographic distribution of entry car demand shows particularly strong traction beyond metropolitan areas. While bookings in the top 100 cities grew approximately 50% in the 18% GST segment, tier 2, tier 3, and rural markets witnessed 65% growth—areas where entry cars typically dominate due to lower income levels and different transportation needs.
Industry observers note that the entry segment's revival challenges narratives that emerged over the past six years suggesting Indian consumers had permanently moved upmarket. Several automakers exited or de-emphasized small car segments, redirecting resources toward SUVs and premium offerings based on assumptions about irreversibly changed preferences.
"The perception some had—that aspirations of all Indians have changed, and nobody wants to buy small cars—has proven to be incorrect," Bhargava stated pointedly. "The reality is that many couldn't afford to buy the more expensive small cars earlier, and now that prices have come down, they have returned to the market."
The chairman emphasized that Maruti's commitment to entry cars extends beyond current profitability considerations. "If it comes to the fact that we need a smaller car with a lower price, even if the margins are not very high, we would still do that," he stated, framing affordable mobility as a mission rather than merely a business segment.
This mission-driven approach reflects Maruti's origins as a government initiative to provide affordable personal transportation. "Maruti's objective is to serve India and its people. We were set up for that purpose. We believe that's our mission," Bhargava explained.
The entry segment revival has practical implications for road safety. Bhargava highlighted that two-wheeler riders face the highest road fatality risks: "Selling cars for people who drive two-wheelers, who have the riskiest vehicle possible. The maximum road deaths are from people riding scooters."
By making entry cars more affordable through the GST reduction, the government has indirectly supported a shift toward safer transportation for vulnerable road users—a public health benefit that extends beyond economic considerations.
Production teams have responded to surging entry car demand by working multiple Sundays in October and November, yet waiting periods of 2-3 weeks persist for many variants. The company currently holds 250,000 bookings in the 18% GST category, a substantial portion of which comprises entry segment vehicles.
The Alto, in particular, has witnessed remarkable renewed interest. As India's bestselling car historically, the Alto had seen volumes decline significantly as prices crept upward due to safety regulations, emission norms, and taxation. The GST reduction has restored some of its original value proposition as an accessible entry point to car ownership.
The WagonR, known for its tall-boy design maximizing interior space within compact dimensions, appeals to families seeking practicality without premium pricing. The Celerio offers slightly more contemporary styling, while the S-Presso combines SUV-inspired design cues with entry-level pricing—diversifying options within the segment.
Maruti holds a near-monopoly position in India's entry car segment, with limited competition from other manufacturers who have largely abandoned these price points. This dominance in a reviving segment provides the company with a structural advantage in pursuing parent Suzuki Motor Corporation's 50% market share target.
However, sustaining the entry segment revival beyond initial pent-up demand requires continued affordability. Bhargava declined to comment on potential future price changes, noting the numerous variables affecting vehicle costs including raw material prices, foreign exchange rates, and regulatory requirements.
The company's long-term projections through 2030-31 are being revised to account for the altered product mix, with entry and small cars expected to grow faster than previously anticipated. This recalibration affects capacity planning, supplier relationships, and technology investments.
Banerjee emphasized that the entry segment growth doesn't come at the expense of other categories. "Please don't say that Maruti is only believing in hatchbacks," he noted, pointing out that models like FRONX are achieving record numbers, demonstrating strength across the portfolio.
Nevertheless, the 20.5% entry car contribution represents a significant portfolio reweighting with implications for average selling prices and margins. The company's average ex-showroom price for the quarter stood at ₹8,57,000, though officials didn't provide year-on-year comparisons to quantify the product mix impact.
Industry analysts suggest that other automakers may reconsider their exit from entry segments if the current trend sustains. Bhargava predicted as much: "I think many car makers will now realise what the nature of the Indian car market is. I expect some of them at least to revise their product mix."
For now, the entry segment's dramatic contribution increase from 16.7% to 20.5% in a matter of weeks stands as perhaps the clearest vindication of the government's GST intervention—demonstrating that significant latent demand existed among price-sensitive buyers who had been priced out of the market, and that the right policy lever could unlock this demand rapidly.
As production scales up and waiting periods normalize, the true test will be whether the 20.5% contribution level represents a new steady state or merely captures an initial surge. Bhargava expects double-digit growth in the segment "for some period to come," suggesting confidence that the entry car comeback has sustainable momentum rather than being a temporary phenomenon driven solely by pent-up demand and festive season sentiment.
The revival of Alto, WagonR, Celerio, and S-Presso thus represents more than a corporate success story—it signals that millions of Indian households still see entry-level cars as their optimal path to safer, more convenient mobility, given the economic realities of a country where the vast majority earn far less than often-cited aspirational income levels would suggest.