India needs to maintain a balance between vehicle regulations and affordability so that first-time buyers are not priced out of the car market, Maruti Suzuki India Managing Director and CEO Hisashi Takeuchi said.
Takeuchi said rising regulatory costs over the years had made car ownership more difficult for many first-time buyers and contributed to a significant decline in India's small-car segment.
“For millions of Indian families, buying a car is still a major aspiration,” Takeuchi said at the 66th SIAM Annual Convention. A car provides families with greater safety, convenience and comfort, making affordability particularly important in India, he added.
He said the response to the recent GST reforms demonstrates how reducing the cost burden can revive demand at the affordable end of the market.
“The impact of the recent GST reforms has shown the power of affordability,” he said.
Entry-level car demand rises sharply
Takeuchi said small cars falling under the 18% GST bracket recorded growth of about 30% during the first four months of the current financial year, compared with nearly 20% growth for vehicles falling under the 40% bracket.
The recovery was even stronger at the bottom of the market.
“Within the small cars, the entry-level cars reported a remarkable growth of almost 100%, making mobility accessible and affordable for several first-time buyers,” Takeuchi said.
He credited the GST reform for improving affordability and thanked the government for the measure.
The sharp growth is significant for Maruti Suzuki, which has historically had a large presence in India's small and entry-level car market.
Safety and cleaner mobility must remain affordable
Takeuchi said future regulation needs to take affordability into account even as the industry moves towards safer and cleaner vehicles.
“In future as well, I hope we can continue to maintain the right balance between regulations and affordability,” he said.
“This will be important to ensure that safer and cleaner mobility remains within the reach of millions of Indian families.”
His comments underlined a recurring concern around India's entry-level car market: while consumers need access to cleaner and safer vehicles, the additional cost of technology and regulatory compliance has made the jump from two-wheelers to cars harder for price-sensitive households.
Multi-technology approach to lower emissions
Takeuchi also linked affordability with Maruti Suzuki's broader approach to sustainable mobility.
He said the company looks at sustainable mobility through five dimensions – reducing carbon emissions, improving air quality, keeping mobility affordable, strengthening energy security and pursuing solutions that can scale.
“We believe that every single vehicle sold should contribute towards carbon reduction, and therefore we pursue multiple technologies,” he said.
Maruti Suzuki's approach includes battery electric vehicles, hybrids, CNG, compressed biogas, ethanol and research into hydrogen.
Takeuchi said hybrids can improve fuel efficiency and reduce carbon emissions, while CNG already has significant scale in India. Biofuels such as compressed biogas and ethanol can also help reduce dependence on fossil fuels.
The company is also researching hydrogen as a possible future mobility option.
Cleaner technologies reach 32% of car sales
Takeuchi said the share of cleaner powertrains in India's passenger vehicle market has continued to increase.
EVs, hybrids and CNG vehicles together accounted for around 27% of industry sales during April-July last year, according to Takeuchi. Their share increased to 32% in the corresponding period this year.
“Every third car sold in India today is a cleaner technology,” he said.
Takeuchi said the increase shows that coordinated government policies and industry efforts can accelerate cleaner mobility.
Takeuchi also highlighted compressed biogas as a technology with particular relevance to India.
The country has large quantities of cow dung, biomass and agricultural waste that can be converted into automotive fuel, he said.
“Compressed biogas has a very strong potential for India,” Takeuchi said.
He said CBG can reduce dependence on fossil fuels, provide an alternative use for agricultural waste, create employment and income in rural areas, and support India's existing CNG vehicle ecosystem.
Suzuki already has three cow dung-based biogas plants operating in India, Takeuchi said. Another seven cow dung-based plants and four agricultural waste-based plants are in the pipeline.
He argued that a larger CBG ecosystem could help CNG remain relevant as a sustainable mobility solution for many years.
India can combine affordability with global scale
Takeuchi said India has the advantage of a large domestic market, engineering capability, manufacturing scale and a strong supplier ecosystem.
Combining these strengths with deeper localisation, technology development and globally competitive quality could help India emerge as a major automotive manufacturing and export hub, he said.
But for the domestic market, his message remained that the transition towards cleaner and safer vehicles needs to keep the economics of car ownership in mind.
For millions of households buying their first car, Takeuchi said, affordability remains fundamental to making personal mobility accessible.