Maruti Suzuki will NOT STOP making small cars: Chairman RC Bhargava

Amidst the rumours of Maruti Suzuki stopping manufacturing small cars due to increased cost, Chairman RC Bhargava cleared the air. In an interview with FE, Bhargava said that the company remains fully committed to the customers of these small vehicles.

Bhargava said that the Union road transport minister Nitin Gadkari has already said that a minimum of six airbags will be mandatory for vehicles that can carry up to eight passengers.

“This means that the entry-level cars and hatchbacks are out of the purview of this proposed regulation. Whenever the same is notified, it would not affect Maruti in any way.” Bhargava said.

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He also says that even entry-level and premium hatchbacks are five-seater vehicles. The Union government made dual front airbags mandatory in all the cars selling in India from January 2022. However, the authorities are yet to make the mandatory six airbag rule mandatory in India.

The small car market is shrinking

Bhargava also mentions that the sale of the small car segment is shrinking for the last three years. However, it still has a market share of around 40%.

Bhargava said earlier this year that the small car market is already shrinking due to increasing costs. He said that in the last three years, the small car market is shrinking, as the massively increased prices of small cars are making them inaccessible for many middle-class people, who are mostly first-time car buyers and see these cars as their first upgrade from a two-wheeler. In one of his statements, he said that while the small cars happened to be the bread and butter for carmakers, the butter has gone and only the bread is remaining now.

Maruti Suzuki is suffering from a decline in its market share in India, which has fallen to 43.4 per cent in the FY22, with major reasons behind this being decrease in interest in small cars and the arrival of more compact and midsize SUVs from rival carmakers.

Maruti Suzuki believes that the small car market is already facing a slowdown due to rising costs because of multiple reasons. Thus, the inclusion of mandatory side and curtain airbags will only add to these reasons, thereby increasing the costs of the small cars even further. The carmaker feels that this slowdown in the sales of compact cars will have many adverse effects, including loss of jobs in the auto sector and difficulty for two-wheeler owners in upgrading to four-wheelers.

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