The small car segment has been on a decline for years, but Maruti Suzuki is expecting a turnaround in 2026 with an improvement in the affordability factor. The share of small cars has been reducing because of a disproportionate increase in the cost of vehicles in the segment.
“Sales of small cars have been declining primarily due to affordability factors such as the increase in commodity prices and regulatory stringency. If the income levels go up as is expected when the economy grows faster, the affordability factor should become better. This could result in a turnaround in the segment somewhere around the second half of 2026,” said Shashank Srivastava, senior executive officer for sales and marketing at Maruti Suzuki.
Maruti Suzuki chairman RC Bhargava had earlier noted that the growth of small cars is essential for the sustained growth of the domestic passenger vehicle market. The share of small cars or hatchbacks has shrunk to around 28 percent in the passenger vehicle market with utility vehicles accounting for more than 50 percent of sales.
The company believes that the small car segment is required to attract more first-time buyers. The de-growth in the small car segment has been a major reason for low single-digit sales expectations for the passenger vehicle segment in the next financial year.
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