India’s largest carmaker, Maruti Suzuki India Ltd, is prioritizing the manufacturing of small automobiles just like the Alto and Spresso, even when it means reducing output of larger fashions, because it believes there may be nonetheless development potential for them on the planet’s third-largest vehicle market.
The New Delhi-based carmaker mentioned on Thursday that mini automobiles just like the Alto and Spresso are exhibiting sturdy development, with gross sales almost doubling in December. The corporate is ramping up manufacturing of those autos to satisfy retail bookings, buoyed by current items and companies tax (GST) cuts.
Dispatches of mini automobiles to sellers in December elevated by 92% year-on-year to 14,225, lifting Maruti’s complete home gross sales by 36% to 192,115 models within the month. Bigger utility car portfolio grew on the tempo of 33% on-year, reaching 73,818.
The manufacturing of mini automobiles is being slowly ramped up, which is mirrored within the December gross sales numbers, following wholesale information for October and November that confirmed a tepid efficiency, in line with a high government.
“There have been many questions as to why this phase isn’t rising. I want to make clear that these are the wholesale numbers. We had been doing fairly nicely with the retail numbers prior to now two months,” Partho Banerjee, senior government officer-marketing and gross sales, mentioned throughout a press briefing on Thursday.
Banerjee added that as the corporate rushes to get such small automobiles to the sellers, it has to sacrifice manufacturing of another fashions from segments like compact autos as a result of restricted capability.
“If we’re producing extra small automobiles, now we have to sacrifice another fashions. So, in an effort to serve our clients on a turn-by-turn foundation, we are attempting to supply the fashions, and we’re delivering them to clients,” Banerjee mentioned.
To make certain, Maruti Suzuki has a manufacturing capability of two.6 million passenger autos yearly throughout 4 amenities in Haryana’s Gurugram and Manesar and Gujarat’s Hansalpur and Kharghoda.
Maruti, which had provided steep reductions since early September along with GST cuts as a part of its strategic pricing, is now contemplating whether or not to proceed with such costs, as demand for its automobiles has picked up in current months.
“We’ll quickly decide,” Banerjee advised reporters.
Falling demand
The highlight has been on the mini automobile phase for the reason that GST charge rationalization, as demand had been declining over the previous few years with customers shifting to sports activities utility autos (SUVs). Since 2019, SUVs have grown from one in 5 automobiles on Indian roads to at least one in two, whereas small automobiles have suffered.
Questions on whether or not the GST minimize can revive the mini automobile phase grew notably after the discharge of October and November information by the business’s premier foyer group, the Society of Indian Vehicle Producers (Siam), on //date//.
In October-November, Siam information confirmed, mini automobiles cumulatively grew simply 3% on-year to 22,415 models, in comparison with 17% (to 207,180 models) for compact SUVs of lower than 4 metres in size.
Whereas December noticed sturdy development, mini automobiles nonetheless face a steep climb to restoration, having been hit the toughest over the previous few years. Between April and December, Maruti recorded a 15% decline in mini automobile gross sales, all the way down to 76,044 models, even because the compact hatchback and utility car segments continued to develop.
Nevertheless, Maruti’s administration is assured that there’s nonetheless room for development within the phase. “Now we have pending bookings of greater than 1.5 months, regardless of seeing development in gross sales. This month, gross sales doubled, but the backlog for mini phase autos stays round 1.5 months,” Banerjee mentioned.
Debates on the prospects of the mini automobile phase have additionally gained consideration as a result of an ongoing dialogue amongst carmakers on whether or not automobiles weighing lower than 909 kg ought to obtain particular aid underneath the upcoming emission norms. Notably, all mini automobiles fall beneath this weight threshold.
Whereas carmakers like Tata Motors, Mahindra and Mahindra, and Hyundai Motor India have been against any such weight-based aid, Maruti has constantly argued that small automobiles deserve particular exemption; in any other case, it could be tough for them to stay viable within the Indian market.
GST enhance
Analysts have beforehand defined that there’s nonetheless some hope left for the phase as development within the post-GST cuts interval will evolve in phases.
Puneet Gupta, director at market analytics agency S&P International Mobility, defined earlier that business development will unfold in phases, with the present momentum pushed largely by patrons who had been already energetic out there.
These customers have now upgraded, gravitating decisively in direction of sub-compact and compact SUVs.
“From April-Might 2026, nonetheless, entry-level and mini automobiles might witness a revival, supplied customers see significant costs related to the phase. The comeback of this phase will hinge on the depth of OEM (Unique Tools Producer) dedication to reignite demand,” Gupta mentioned, including that Maruti Suzuki will play a decisive function on this shift.
