Maruti Suzuki India Ltd Chairman R.C. Bhargava has strongly refuted claims that small cars are losing their market relevance in India, projecting a substantial demand for these entry-level vehicles well into 2047. Bhargava emphasized that India's large population will continue to sustain a robust market for affordable vehicles, even as the demand for Sports Utility Vehicles (SUVs) continues to grow.
Addressing reporters at a virtual press conference following the company’s second-quarter results, Bhargava highlighted compelling sales figures. In the first half of fiscal year 2027 (H1 FY27), Maruti Suzuki, India’s largest carmaker by volume, sold an impressive 398,000 small cars. This figure significantly outpaced its SUV sales, which stood at 162,000 units during the same period.
Defying Predictions of Decline
“Many people had been writing the obituary of small cars for the last two or three years, saying that all car buyers in India are highly aspirational and will only buy SUVs with the latest gadgets and features,” Bhargava stated. He countered these predictions, arguing that India's automobile market is vast enough to accommodate both small cars and SUVs, rather than shifting entirely towards larger vehicle segments.
Bhargava expressed strong confidence in the long-term relevance of the small car segment. “Even by 2047, when India will be among the ranks of developed countries, there will be a sizeable small-car market in this country because we have a large population,” he affirmed, underlining the demographic factors that support his outlook.
Impact of GST Reforms and Market Trends
While consumer aspirations and evolving preferences are indeed driving increased demand for SUVs, prompting automakers to expand their offerings in that segment, small cars remain a crucial part of Maruti Suzuki's business strategy, particularly for price-conscious buyers.
Bhargava also credited the GST 2.0 reforms, introduced by the government on September 22, 2025, as a “watershed moment” for the Indian auto industry. He noted that the full impact of these changes began to materialize in the current financial year, leading to increased production capacity and improved vehicle availability across the sector. These reforms, according to Bhargava, played a vital role in reviving demand, especially among lower and middle-income households whose car ownership aspirations were previously constrained by affordability.
Despite global geopolitical tensions, elevated raw material costs, and the challenge of absorbing higher input costs, India’s passenger vehicle market recorded its strongest-ever first-half production and domestic sales. Bhargava also observed that rural demand continues to grow slightly faster than urban demand, extending a trend that has been evident for several years.