India is graduating from small cars to upper-segment models

Maruti Suzuki Chairman RC Bhargava says the company is in a transition phase and plans to introduce more models in the mid-and upper-SUV and MPV segments, but will not abandon entry-level cars for now.

- KETAN THAKKAR AND MAYANK DHINGRA

The chairman of Maruti Suzuki, RC Bhargava, says Indians are moving towards higher priced SUVs and MUVS and his company is in the 'phase of transition' to cater to this 'shift in the composition of the market'.

Bhargava forecasts that the market for its 'bread-and-butter hatchback segment is likely to decline in FY24 in a market that is "set to grow by eight percent."

Speaking to media post the Maruti Suzuki Q2 FY23 earnings call, Bhargava said, "It is the result of the fact that there has been a shift in the composition of the market. We are moving away from a market which was predominantly small cars and hatchbacks, to a market which is more in the upper segment cars - the SUVs and MPVs."

The chair of India's largest carmaker attributed the decline of the small-car segment to the consistent degradation of buyer's affordability.

"The overall hatchback segment has been on a declining trend for the last three years; the volumes of hatchbacks have fallen by 27-28 percent and the inflation has only made it worse. I expect the small-car segment to further decline next year," said Bhargava. "We are, however, in a phase of transition," he added.