Overall small car sales (include mini and compact segments) fell from 16.4 lakh units in FY23 to 14.5 lakh units in FY24
Overall small car sales (include mini and compact segments) fell from 16.4 lakh units in FY23 to 14.5 lakh units in FY24, a decline of 11.4%, followed by a further 11.7% drop to 12.8 lakh units in FY25. In FY26, however, sales edged up to 13.2 lakh units, showing a 3.2% year-on-year recovery. In the first five months of the current fiscal, hatchback volumes grew 27% to 5.9 lakh units, according to Siam data. Sales of small cars grew 58% this year, resulting in share of first-time buyers rising from 44% to 54%, back to levels seen in FY19,” said Partho Banerjee , senior executive officer, marketing & sales, Maruti Suzuki India . Since GST 2.0 revision, starting prices of Maruti’s key small-car models have remained unchanged, despite significant commodity and input-cost pressures.
He said for entry-level cars, where a buyer is upgrading from a two-wheeler to four-wheeler, the priority is not a sunroof or other premium features, but simply owning a car. “This has translated into a strong market response, with growth in volumes and share of first-time buyers,” Banerjee added. Chennai: Following a two-year decline in volumes, the small car segment is showing signs of revival, helped by GST rate cut on small cars. The lower tax burden has reduced the price barrier for buyers at the bottom end of the market, making entry-level cars more affordable. “The potential of the small-car segment remains strong. That makes the small-car market particularly sensitive to increases in costs.
Following GST rate revision, sales of cars attracting 18% GST have been growing at around 30%, compared with about 22% for vehicles attracting 40% GST. He also pointed to the WagonR, which has been selling about 21,000 units a month despite the SUV boom. India has a two-wheeler parc of around 27 crore, while car penetration remains at just 34 cars per 1,000 people.
“Majority of players have reported positive growth in hatchback sales in this fiscal. You Can Also Check: Gold Rate in Chennai | Silver Rate in Chennai | Bank Holidays in Chennai | Public Holidays in Chennai | Chennai AQI | Weather in Chennai | Petrol Price in Chennai | Diesel Price in Chennai | CNG Price in Chennai | LPG Price in Chennai Stay updated with the latest Chennai news.
“After GST 2.0, the growth is clearly stronger among people buying lower-priced vehicles, whose purchasing power is more limited,” said an analyst at a brokerage firm. Affordability is what is holding them back,” he said. However, Banerjee said Maruti would continue to introduce refreshes, irrespective of whether the market is growing faster or slower, citing the recent unveiling of the Baleno with added features. In developed markets such as Japan, higher levels of motorisation have been driven by a combination of rising aspirations and improving affordability, enabling more consumers to convert their aspirations into vehicle ownership, said Banerjee.
There is a huge amount of interest among people who want to buy a four-wheeler. “There is also a need for more launches in this segment to keep the excitement alive. There aren’t enough models to excite customers, as most of the launches have happened in the UV segment. Hyundai, too, has indicated that it plans to launch an upgraded i10 in the near future. Download the TOI App.