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Maruti Suzuki expects volume of small car segment will increase
“We believe absolute volume (of small cars) will increase but as a percentage of the total volume (of passenger vehicles), which is 38 per cent at the moment, this may show a decrease, but in absolute volume terms, it will increase,” Shashank Srivastava, the executive director of marketing at sales at Maruti Suzuki India Limited (MSIL) said on Sunday.
A senior official of Maruti Suzuki India Limited (MSIL) has said the automaker expects the volume of the small car segment to increase despite a declining share in the overall domestic passenger vehicles market. “We believe absolute volume (of small cars) will increase but as a percentage of the total volume (of passenger vehicles), which is 38 per cent at the moment, this may show a decrease, but in absolute volume terms, it will increase,” Shashank Srivastava, the executive director of marketing at sales at MSIL told news agency PTI on Sunday.
Srivastava said that the hatchback market fluctuated between 45-46 per cent of the total passenger vehicles market over the last five years and in 2021, it dipped to about 38 per cent. The sport utility vehicle (SUV) segment with 40 per cent of the overall market became the largest selling segment. The senior Maruti official, however, highlighted the small-car segment is still pretty large in terms of absolute volume.
On being asked why Maruti was bullish on the small car segment, Shashank Srivastava told PTI on Sunday that India's projected economic growth for the future is propelling the requirement for transportation. “There will be first-time buyers because a new workforce coming in means the demand for the hatches will continue,” Srivastava said.
“We are still not a high GDP per capita country where people straight away go into a large car or a high price car. So, that is the reason why we are confident that this demand in this segment will remain strong and grow,” he added.
Talking about the challenges that the segment would face, Srivastava said one of the biggest challenges was the affordability factor.
Srivastava said the affordability factor has come down as prices of vehicles are going up because of compliance with new regulations, an increase in commodity prices and the addition of new features to cars.
The rate of increase in the income level of the consumers in the small car segment is slower than the increase in price levels, he pointed out. A few days back, Shashank Srivastava said that Maruti is considering the SUV segment as a key area to lift its overall market share in India. At present, the automaker's share in the segment is 45 per cent and the aim is to lift it to 50 per cent.
(With PTI inputs)
