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Ignored by desis, small cars are driving Made in India ambitions elsewhere

2 weeks ago 41

The average Indian in 2024 might prefer to buy a tank-sized automotive beauty with all the frills over a smaller car. However, what the desis seem to be rejecting, are turning out to be the backbone of India's car exports.

The SUV breeze has affected the sales of smaller cars and sedans in India over the last few years. Yet, these ‘Made in India’ cars sold by the likes of Maruti Suzuki, Hyundai, Kia, Citroen, Volkswagen, Honda, Nissan and Renault are being exported worldwide, TOI said in a report.

Maruti Suzuki has been exporting models including the Swift Dzire, S-Presso, Baleno and Swift.


Fresh lease of life for small cars

The premiumisation drive coupled with a lack of affordability for the smaller variants, put the sales for hatchbacks on the slower gear.

Currently, the small car segment, once a dominant force in the Indian passenger vehicles market, now comprises less than 30 per cent of the total market share.

Maruti Suzuki expressed optimism about the resurgence observed in the two-wheeler market, which has been in decline since 2018-19, believing it will also positively affect sales in the small car segment.

India’s top passenger vehicle exporter Maruti shipped 2.8 lakh cars in FY24, securing its position as the top PV exporter. These vehicles were dispatched to various destinations including South Africa, Saudi Arabia, Chile, Mexico, and the Philippines.

"India's time has come. With 'Make in India for the world' vision, there is no reason why PV exports should not grow exponentially," TOI quoted Rahul Bharti, executive officer at Maruti Suzuki as saying.

Apart from Venue and Alcazar SUVs, Hyundai exports Verna and Aura sedans along with the Grand i10Nios. These vehicles are shipped to various destinations including South Africa, Saudi Arabia, Mexico, Chile, and Peru.

SIAMET Online

"These models are in high demand in export markets. Produced at our Chennai factory, the products enjoy global acceptance," India COO Tarun Garg said.

Why are Indians not buying small cars?

In FY18, small cars constituted 47.4 per cent of India's total PV market share, which slightly decreased to 46 per cent in FY19. There was a marginal improvement to 46.5 per cent in FY20, but the share has been steadily declining since then.

"The SUV segment's contribution has gone up to 53.6 per cent of total (passenger vehicle) industry as a result of which the contribution of the small (car) segment has gone down a little bit further," Maruti Suzuki India Senior Executive Officer, Marketing & Sales, Partho Banerjee said in a virtual interaction.

There has been a "steep increase in the prices of hatchbacks" due to a variety of reasons, including regulations related to safety and emissions standards but the "affordability" of small car buyers has not increased to that extent, he added.

"As a result, there has been a drop in the contribution of the hatchback segment but our take is that this hatchback segment will again come back...we expect that, maybe by 2026-end or 2027 we will again be seeing a growth in the hatch segment and this market will revive," Banerjee said.

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