Weakness in sub-Rs 10 lakh market a cause of worry, says Maruti Suzuki’s Bhargava

RC Bhargava, the chairman of India’s largest passenger car maker Maruti Suzuki India, today expressed concern over the degrowth in sales in the sub-Rs 10 lakh car segment, and said it is a cause of worry for the passenger vehicle industry.

“The market under Rs 10 lakh is not growing. In fact, it is declining and that is a cause of some worry. Because unless that lower end of the market grows, there are going to be no feeders into the upper market,” Bhargava told reporters after announcing the company's second-quarter results.

The weakness in the sales of small or hatchbacks has been the major factor that has resulted in a slowdown in passenger vehicle sales. The sales are now being driven solely by the utility vehicle segment. As per the SIAM data, India’s passenger vehicle sales during the first half of the financial year remained almost flat at 20.81 lakh units.

Bhargava noted that the overall slowdown in passenger vehicles is not a concern, but the decline in the sub-Rs 10 lakh market, which comprised 80% of the total cars sold a couple of years back, is the real concern.

“The fact that growth is taking place only in the more expensive cars doesn’t make me very happy,” he said. “If 80% of what used to be the market is not growing, but declining, how will the other market make up for the rest of the growth?”

India's small and affordable car market has been declining since the pandemic, with hatchbacks losing their market share steadily. SUVs are now driving the overall  passenger vehicles industry sales, accounting for around 50% of the industry volumes.

Affordability is the factor that impacted the sales of sub-Rs 10 lakh cars the most; and Bhargava feels consumers need to have more disposable income at their hands for the segment to revive.

Maruti Suzuki had also mentioned earlier that the growth of small cars/hatchbacks are necessary for the sustained growth of the passenger vehicle industry as it attracts more first-time buyers to the market.

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