As sales for models like the Maruti Alto, S Presso, and Celerio continue to drop year after year, it’s crucial for Maruti Suzuki to introduce a new entry-level car. This move isn’t just about launching another vehicle; it’s about strategically exploring various powertrain options that will cater to today’s market demands. The inclusion of a factory-fitted CNG kit—now standard on nearly every Maruti Suzuki model—is just the beginning. The brand is also considering mild-hybrid and flex-fuel powertrain options, which could significantly enhance the new small car’s appeal.

According to Suzuki’s Mid-Term Management Plan, this initiative is part of a larger strategy aimed at reclaiming its impressive 50 percent market share in India before this decade concludes. Introducing a well-thought-out small car now can be the key for Maruti Suzuki to not only meet customer expectations but also solidify its standing in an increasingly competitive landscape. This is an opportunity that shouldn’t be missed!

Maruti Suzuki Plans New Entry-Level Car

The Management Plan outlines a compelling product strategy tailored for the Indian car market, focusing on the swift development and launch of entry-level vehicles that resonate with the needs of budget-conscious customers. This strategy emphasizes introducing a distinctive entry-level car designed specifically for Indian consumers earning between Rs 5-13 lakh annually, effectively targeting first-time buyers.

Importantly, this new small car will come equipped with multiple powertrain options, including CNG, flex-fuel, and mild-hybrid variants. It’s crucial to note that this vehicle is entirely separate from Maruti’s forthcoming low-cost electric vehicle planned for India. According to our mid-term projections, both this new competitor to the Tiago EV and the entry-level internal combustion engine model are set to hit the market before FY2031.

The recent drop in small car sales in India has notably impacted Maruti’s market share. The passenger vehicle market is currently experiencing sluggish growth, largely due to a high base effect and persistent challenges in the small car segment. This decline primarily affects entry-level hatchbacks, which are crucial for attracting first-time buyers transitioning from two-wheelers.

However, it’s essential to recognize the insights shared by Suzuki’s president, Toshihiro Suzuki. He noted that while small car sales are on the decline, they will eventually stabilize. In fact, Maruti Suzuki’s performance in this segment is still competitive when compared to SUVs sold by other manufacturers. Importantly, the demand for small cars won’t vanish entirely; there remains a significant opportunity with over 1 billion people in India yet to move from two-wheelers to four-wheel vehicles.

Even as SUV demand grows at a steady pace within overall passenger vehicle sales, the continued downturn of affordable cars highlights an urgent need for innovation and adaptation within this critical market sector. With current car penetration at just 34%, there’s ample room for growth—especially if we focus on delivering quality options that cater to new drivers entering this phase of their automotive journey.

Maruti Suzuki’s leadership has consistently emphasized the urgent need to revitalize the small and affordable car segment for long-term growth in the passenger vehicle market. The company’s market share has dipped to approximately 41 percent, largely due to a downturn in the small car sector, which has historically been its strength. While Maruti Suzuki has made strides into the SUV arena recently, it is imperative for them to rejuvenate their small car offerings to reclaim a dominant 50 percent market share.

The decline in small car sales can be attributed to rising costs. Buyers of entry-level vehicles are particularly sensitive to both acquisition and operating expenses. Over recent years, significant price hikes have outpaced income growth among this demographic, especially following BS6 emission standards and safety regulations.

Moreover, consumers are demanding affordable small cars that offer better fuel efficiency. In a recent discussion with our sister publication Autocar Professional, Maruti Suzuki Chairman RC Bhargava underscored this critical point…

Top Budget-Friendly Maruti Cars Available Now

The Maruti Alto K10 stands out as the most budget-friendly option in Maruti’s lineup, starting at an impressive ex-showroom price of just Rs 4.09 lakh. This makes it an unbeatable choice for those seeking affordability without sacrificing quality. Following closely is the S-Presso, priced at Rs 4.27 lakh, showcasing that great value can still be found in this segment. While many car manufacturers have abandoned the sub-5 lakh market, Renault perseveres with their Kwid starting at Rs 4.69 lakh, but why settle for less when you can opt for the Alto K10?