Calling the notion that Indian buyers have fully migrated to SUVs “incorrect,” Bhargava added that there is enduring relevance for small cars in a price-sensitive market.
31 Oct 2025 | 1936 Views | By Prerna Lidhoo and Kiran Murali
The share of small cars in Maruti Suzuki’s overall sales surged past 25% during the festive period, up sharply from 16.6% before the GST rate cut announced on September 22. The turnaround, the company says, is being driven by renewed affordability and a shift in consumer sentiment following the government’s ...
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The share of small cars in Maruti Suzuki’s overall sales surged past 25% during the festive period, up sharply from 16.6% before the GST rate cut announced on September 22. The turnaround, the company says, is being driven by renewed affordability and a shift in consumer sentiment following the government’s decision to reduce GST on entry-level vehicles.
“Much of our production is in the 18% GST category, which is growing faster. The beneficiaries of small car sales at the moment are limited, but many carmakers will realise the true nature of the Indian car market. I expect some of them to revise their product mix in favour of hatchbacks. Maruti, too, has become much more flexible in manufacturing as per market demand shifts,” said RC Bhargava, Chairman, Maruti Suzuki India.
He said there has been an impact on small car buyers, and the government has taken a timely step by reducing GST. “People are now coming back to the market. Retail sales during the festive period were largely driven by small cars. The perception that nobody wants to buy small cars and the market has moved to more luxurious cars has changed,” he said.
Bhargava added that 69% of the market share in the 18% GST category currently belongs to small cars — a segment he expects to grow faster than the rest of the market.
During the second quarter (July–September) of FY2025–26, Maruti Suzuki India reported its highest-ever net sales at ₹401,359 million, compared to ₹355,891 million in the same period last year. Domestic wholesales, however, declined 5.1% year-on-year to 440,387 units, as buyers deferred purchases in anticipation of GST-led price reductions.
Calling the notion that Indian buyers have fully migrated to SUVs “incorrect,” Bhargava added that there is enduring relevance for small cars in a price-sensitive market. “India is a small car market. Only about 10–12% of households have an annual income above ₹15 lakh. The rest are lower-income households. The decline in small car sales in recent years was always an affordability issue, not a preference shift,” he said.
With the GST cut breathing new life into the segment, he expects the revival of hatchbacks to continue through the current fiscal year as well.