Maruti Suzuki Sees Sharp Growth in Small Car Sales, Warns of Risk From Any Future Fuel Price Increase

India’s largest car maker Maruti Suzuki posted strong double-digit growth in the sales of its small cars during April, which the company attributed to capacity unlocking and robust demand. However, the automaker warned that any potential increase in fuel prices could dampen momentum in the entry-level segment.

Its small car portfolio includes four models - Alto, Espresso, Celerio and Waggon R – while its mini segment includes Alto and S-Presso. During April, Maruti Suzuki’s small cars registered close to 75% on-year growth, while mini car sales more than doubled to 16,066 units. Total monthly domestic passenger vehicle sales rose 35% to an all-time high of 1.88 lakh units.

“From the month of April, our production team has been able to partly unlock the production capacity for the small cars, and as the demand is there. We have been able to supply that,” Maruti Suzuki’s Senior Executive Officer for Marketing & Sales Partho Banerjee told reporters on Friday.

The automaker’s management has been saying the demand for small and entry-level cars remains strong after the recent reduction in the Goods and Services Tax (GST), but production constraints are limiting dispatches. The segment had seen a steep decline over the past few years due to affordability pressures and shifting consumer preferences toward SUVs.

Industry data shows that the proportion of cars priced below Rs 10 lakh, which make up the entry-level category, fell to 6% of total sales in the financial year 2025–26, compared with 12.5% in the financial year 2023–24.

SUVs now make up about 67% of passenger vehicle sales. Data indicate that entry-level and small cars, largely hatchbacks, have been in steady decline since peaking around the financial year 2018–19. Sales in this segment are estimated to be 35–45% lower than pre-pandemic levels, as higher vehicle prices, tighter regulatory requirements and rising ownership expenses have reduced affordability for first-time buyers.

This shift in consumer preference has weighed more heavily on Maruti Suzuki. The carmaker, long known for its dominance in the small car segment, has seen its domestic passenger vehicle market share fall from more than 50% in the financial year 2018–19 to about 40% in the financial year 2025–26, as demand moved towards SUVs and rivals expanded their presence in higher-value segments.

“In case of the mini segment, what we are seeing is as soon as we had the capacities to deliver the vehicle, we are seeing a huge growth…In India today, there are still close to 27 crore customers who have a two-wheeler, aspiring to upgrade to a four-wheeler. Logically speaking, not everybody is going to leapfrog to an SUV. There has to be a stepping stone in between,” Banerjee said.

Recently, Maruti Suzuki Chairman RC Bhargava said the recent reduction in GST rates is expected to gradually revive growth in the demand for small cars and increase the segment’s contribution going forward.

Meanwhile, Banerjee noted that the West Asia crisis has so far had no material impact on domestic demand, with supply chains and production remaining stable. However, it cautioned that any increase in fuel prices would directly affect small car sales, as demand in the entry-level segment remains highly sensitive to running costs.