After experiencing years of decline in the small car segment, Maruti Suzuki, India’s largest passenger car manufacturer, anticipates a revival in the sector by 2026, attributing the potential turnaround to enhanced affordability. The popularity of small cars, or hatchbacks, has steadily dwindled, with sport utility vehicles (SUVs) dominating overall passenger vehicle sales.
Shashank Srivastava, Maruti Suzuki’s Senior Executive Officer for Sales and Marketing, highlighted that the affordability factor has been a primary driver behind the decline in small car sales. However, he expressed optimism about a potential resurgence in the segment by the latter half of 2026. The small car segment bore the brunt of the pandemic’s impact, largely due to disproportionate increases in vehicle costs, influenced by factors such as rising commodity prices and regulatory requirements.
Looking ahead, Shashank expects moderation in price hikes within the small car segment. He emphasised that as income levels rise, driven by anticipated economic growth, the affordability factor could improve, leading to a potential uplift in the small car segment by 2026. Maruti Suzuki’s Chairman, RC Bhargava, emphasised the importance of small car growth for sustaining the domestic passenger vehicle market.
Hyundai Motor, India’s second-largest carmaker, echoed the sentiment, acknowledging the significance of the small car segment. Tarun Garg, Chief Operating Officer of Hyundai Motor India, emphasised that while the trend may see a continued decline in small car share in favour of SUVs, the segment remains substantial and cannot be disregarded.
The declining small car segment has contributed to low single-digit sales expectations for the passenger vehicle segment in the upcoming financial year. Despite this, the industry acknowledges the necessity of nurturing the small car market to attract first-time buyers and sustain future growth in sedans and SUVs.