By buld_online 
Once the bedrock of India’s passenger vehicle market, small cars are now rapidly slipping into the shadows. Maruti Suzuki India, the country’s largest carmaker, has raised the alarm over this sustained decline, calling for government incentives to rekindle interest in the segment that once drove India’s automotive boom.
Entry-level cars priced below ₹5 lakh have seen a steep fall in sales — from 9,34,538 units in FY16 to just 25,402 units in FY25. Even Maruti Suzuki, historically dominant in this segment, recorded a drop in sales of its Alto and S-Presso models to 6,776 units in May 2025 from 9,902 units a year earlier. Compact models like Baleno, Celerio, Dzire, Ignis, Swift, and WagonR also registered a decline, selling 61,502 units versus 68,206 in May 2024.
Partho Banerjee, Senior Executive Officer (Marketing & Sales) at Maruti Suzuki India, attributed the downturn to rising regulatory costs. “So somewhere the government has to understand that if they want to fuel the growth of the auto industry, they need to understand where the problem is and how to increase the size of the pie (small car sales),” he said. He added, “Some incentives are required so that the customer who is not able to afford the car can come in and can migrate to a four-wheeler from a two-wheeler.”
Small cars made up 47.4% of the total passenger vehicle (PV) market in FY18, slightly dipped to 46% in FY19, and peaked at 46.5% in FY20. Since then, the share has consistently declined — 45.6% in FY21, 37.5% in FY22, 34.4% in FY23, and 27.7% in FY24.
On other fronts, the carmaker noted that it has not experienced any immediate impact from China’s new export controls on rare earth magnets. Rahul Bharti, Senior Executive Officer (Corporate Affairs), said the industry is working with the government on required end-user certificates. “So that process is on and industry is in discussion with the government,” he stated.
China controls over 90% of global processing capacity for these magnets, essential to sectors like automobiles, appliances, and clean energy.
On exports, Maruti Suzuki is targeting a 20% increase this fiscal year, aiming to sell 4 lakh units compared to last year’s 3,32,585 units. “Our target for this year (FY26) is at least four lakh units, which implies a growth of at least 20 per cent over FY25,” said Bharti. He highlighted that their exports span nearly 100 countries with strong demand from Africa, Latin America, Southeast Asia, and now Japan, which has quickly become the company’s second-largest export destination thanks to the Fronx and Jimny models.
“We do think that our market share in exports will grow this year. We are already at 43 per cent and the golden mark of 50 per cent is close,” Bharti added.
In FY25, Fronx, Jimny, Baleno, Swift, and Dzire led Maruti Suzuki’s exports, with South Africa, Saudi Arabia, Chile, Japan, and Mexico among its top destinations.
(With inputs from PTI)