Shashank Srivastava Executive Director of Maruti Suzuki
According to Shashank Srivastava, Maruti Suzuki of India Ltd Senior Executive Director, the company's compact car sector is anticipated to rise in volume despite a diminishing proportion of the total domestic passenger vehicle market (Marketing & Sales),
He stated that cost is a key issue that has hampered the expansion of small-car segment. The firm is banking on first-time purchasers as well as additional clients from rural and suburban locations — tier II and 3 tow trucks.
"We expect absolute volume (of tiny cars) will grow," PTI cited Srivastava as saying. "However, as a proportion of overall quantity vehicles, which is currently 38%, this may indicate a reduction, but in pure volume terms, it will climb."
For the previous five years, the hatchback market has fluctuated between 45 and 46 percent of the whole passenger car market, but last year it dropped to around 38 percent, and SUVs, with 40 percent of the total market, became the highest selling segment, he noted.
But, in terms of total volume, Srivastava claims that the small-car market remains rather substantial.
"If you consider the previous fiscal's max volume of around 30.7 lakh, hatch accounts for almost 40% of it."
Last year, it was barely under 12 lakh. Last year, the SUV market was worth 12.3 lakh rupees. So there isn't a huge distinction in terms of capacity "He stated.
Srivastava explained that MSIL is bullish just on small-car market, citing India's predicted economic development in the future, a young population, and a flow of youth joining the workforce each year as positive aspects.
It is also one of reasons why first-time purchasers in India have ranged between 45 and 48 percent over the last three decades, he said "There will be first-time buyers since the increased demand for hatches is expected to continue.
"We are still not a high GDP per capita country where people immediately buy a huge or expensive automobile."
"As a result, we are confident that market in this area will remain healthy and increase,"
However, he stated one of the most difficult difficulties for the small-car market is pricing, since buyers are extremely price sensitive.
He claims that when vehicle prices rise owing to reasons such as compliance with new rules such as pollution and safety standards, increases in commodity prices, and the addition of additional amenities to vehicles, the economic factor has decreased.
"In this category, the rate of growth in price levels is faster than the percentage increase in consumer income."
"The affordability aspect has reduced since the pace at which these automobile prices have grown over the past two or three years has been faster than the rate during which income has increased."
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