Maruti Suzuki Optimistic of 10% Growth in Small Car Segment by FY’27

Maruti Suzuki expects its small car segment to grow by 10% annually through FY’27, driven by improved affordability and sustained demand from price-conscious buyers. The recent revision of the GST rates, will surely help in the growth of sales said Partho Banerjee, Senior Executive Officer - Marketing & Sales, Maruti Suzuki India Limited. In an exclusive interview with Acko Drive, on the side lines of the Annual SIAM Convention, he said, “In the long term, we are looking at a growth of 10% from the small car segment.”

‘Long term’ here refers to a timeline of FY’27. He said, “In short term there will be a pent up demand which we should not read too much into it. H1 has not been great for the industry this year and H2 will be about serving up the pent up demand.” Hence the actual growth will be seen in FY’27. 

In FY 24–25, the small car segment faced headwinds, with volumes down by 9%, underscoring a challenging market environment characterised by rising input costs and shifting consumer preferences toward SUVs. Despite this, small cars still accounted for 70% of Maruti’s total sales.  

Historically, India’s small car market sold approximately 1.2 million units in FY 24, of which Maruti Suzuki contributed 810,000 units, maintaining a 68% market share in the segment. However, the segment’s share of overall passenger vehicle sales has contracted from over 50% in FY 18 to 27.7% in FY 24, as hatchbacks ceded ground to SUVs and premium models.

The first quarter of FY 26 painted a mixed picture: domestic small car sales declined by 4.5% year-on-year to 430,889 units, driven by a 36.6% drop in mini-segment volumes (19,522 units) and a 6.3% fall in compact cars (177,270 units). Maruti’s management noted these pressures but remains confident that reforms such as GST rationalisation and lower financing costs will rekindle demand.

Looking ahead, Maruti Suzuki aims to leverage new-model launches and cost efficiencies to capitalise on latent demand. With entry-level cars poised for renewed growth, the company projects the small car segment to regain momentum by FY 27.