**Maruti Suzuki Focuses on Small Car Production Amid Market Shifts**
Maruti Suzuki India Ltd, the largest car manufacturer in India, is shifting its focus towards the production of small cars such as the Alto and Spresso, even if it means reducing output of larger models. The company believes there is still significant growth potential for these vehicles in the country’s rapidly evolving automobile market.
In a recent announcement, the New Delhi-based automaker reported that sales of mini cars like the Alto and Spresso nearly doubled in December, prompting the company to increase production to meet rising retail demand, particularly following recent cuts in goods and services tax (GST).
In December, dispatches of mini cars to dealers surged by 92% year-on-year, totaling 14,225 units, which contributed to a 36% increase in Maruti’s overall domestic sales, reaching 192,115 units for the month. Meanwhile, the larger utility vehicle segment also saw a healthy growth rate of 33% year-on-year, with sales hitting 73,818 units.
Partho Banerjee, Senior Executive Officer of Marketing and Sales, clarified during a press briefing that while wholesale numbers for mini cars had been lackluster in October and November, retail sales had been strong. He emphasized that the company is prioritizing the production of small cars, which necessitates a reduction in the output of other models, particularly in the compact vehicle segment, due to limited production capacity.
Maruti Suzuki operates with an annual production capacity of 2.6 million passenger vehicles across its four facilities located in Gurugram and Manesar in Haryana, as well as Hansalpur and Kharghoda in Gujarat. The company has been offering significant discounts since early September, alongside GST reductions, as part of its pricing strategy, and is currently evaluating whether to maintain these discounts in light of the recent uptick in demand.
The mini car segment has garnered attention following the GST rate adjustments, especially as consumer preferences have shifted towards sports utility vehicles (SUVs) over the past few years. Since 2019, the proportion of SUVs on Indian roads has increased dramatically, from one in five cars to one in two, while small cars have faced declining sales.
As the market continues to evolve, the effectiveness of the GST cuts in revitalizing the mini car segment remains a topic of discussion, particularly following the release of industry data from the Society of Indian Automobile Manufacturers (SIAM).
**FAQ**
**Q: Why is Maruti Suzuki focusing on small cars?**
A: Maruti Suzuki is prioritizing small cars due to their strong sales growth and potential for further expansion in the Indian market, despite a general shift towards larger SUVs.
