Without growing small car segment, Indian market can't grow even at 6-7 percent, says R C Bhargava
"The future growth of sedan and SUV will come from small cars. We will not get large growth without growing the small car market," said RC Bhargava.
R C Bhargava, the Chairman of India's largest car maker Maruti Suzuki says "small car growth" is essential for long-term car growth in the country.
Speaking to the media post the Q2 FY-24 earnings, Bhargava said "The future growth of sedan and SUV will come from small cars. We will not get large growth without growing the small car market."
In the first six months of this financial year, the entry car segment or mini car market declined to about 1 lakh units registering a drop of 37 percent.
The compact car market too slipped marginally, in a market that has grown by over 7 percent.
The head of the largest car maker forecasts the next year's growth to remain flat and the small car market to come back to growth only after two years.
The Indian car market which has scaled new peaks will hit a speed bump and may post flat growth next year, but Maruti Suzuki on its part will look to grow and aims to grab its 50 percent market share.
Bhargava said that due to multiple regulations, the cost of entry cars has increased and that has compelled prospective buyers to defer purchases.
"I am assuming that the buyers in that segment will be able to absorb the price increases seen in the last few years and will come back. The small car market has to grow for long-term sustenance of the market, if not it will be hard for Indian market to grow even at 6-7 percent," added Bhargava.
"If the Indian economy continues to grow at 6-7 percent, a prerequisite to that is the growth of the car market. But the fact that the Indian PV market has got somewhat distorted because of the disproportionate impact of regulatory changes on small cars in comparison to big cars, there is a situation that the small car buyer has had to postpone the buying decision because of the higher price of these models at this point," Bhargava said.
"We are only speculating how much time it will take a small car buyer to get over this affordability hurdle, and it could take another 2-3 years before the small car segment revives," Bhargava pointed out.
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