Maruti Suzuki Warns of Flat Growth, Small Car Sales Collapse

The company’s cautious stance raises broader questions about the future trajectory of India's auto industry.

By Pratik Rakshit

Last updated: April 29, 2025 | 2 min read

The company’s cautious stance raises broader questions about the future trajectory of India's auto industry.

Maruti Suzuki, India’s largest carmaker, has issued a cautionary note on the future of the domestic market, projecting minimal growth in the current financial year and highlighting deep-seated challenges in the small car segment. Following the release of its fourth-quarter earnings on Friday, Maruti’s management signaled that FY26 could see domestic passenger vehicle industry growth slow to just 1–2%, far below the historical trend.

“Overall demand is not growing,” Maruti’s management stated during the post-results conference call, pointing specifically to a concerning trend: the declining affordability and demand for small cars, once the backbone of India’s automotive boom.

Maruti Suzuki Fronx — **The company’s own domestic sales growth was muted in FY25, registering just a 3% increase**

(Also Read: Maruti Suzuki To Launch New SUV This Year: What Could It Be?)

The company’s own domestic sales growth was muted in FY25, registering just a 3% increase — a far cry from the double-digit expansion rates seen in previous decades. Management attributed the stagnation primarily to affordability challenges among middle-income buyers, compounded by inflation, rising cost of living, and broader economic pressures.

Maruti Suzuki Ignis Radiance Edition — **Notably, the small and mid-sized car segment — historically Maruti’s stronghold — has seen a dramatic shift.**

Notably, the small and mid-sized car segment — historically Maruti’s stronghold — has seen a dramatic shift. A decade ago, vehicles from these segments accounted for 64% of all cars sold in India. Today, they represent only 35%, according to industry data shared during the call.

(Also Read: Maruti Suzuki to Launch e Vitara EV by September 2025; Exports to 100+ Markets Planned)

Several factors are driving this transformation. While inflation and high ownership costs have squeezed budgets, the proliferation of ride-hailing services has offered urban consumers an alternative to car ownership. Moreover, aspirations have shifted, with many first-time buyers now preferring SUVs over compact hatchbacks, a segment where Maruti has had to play catch-up against newer rivals.

Mahindra Thar vs Maruti Suzuki Jimny — **While inflation and high ownership costs have squeezed budgets, the proliferation of ride-hailing services has offered urban consumers an alternative to car ownership.**

(Also Read: Maruti Suzuki FY25 Profit Grows 5.6% to ₹13,955 Cr; Exports Drive 4.6% Volume Growth)

The company’s cautious stance raises broader questions about the future trajectory of India's auto industry. After a decade of rapid expansion fueled by a rising middle class, car ownership no longer appears to be the definitive milestone it once was, particularly among younger demographics.

About the author

Pratik Rakshit

Pratik Rakshit has been writing and talking about cars since 2015. A journalism postgraduate from the Asian College of Journalism, Chennai, he has worked across both magazine and digital platforms, developing a sharp, well-rounded voice in automotive storytelling. From hatchbacks to high-performance SUVs, he tests cars the old-school way—by feel, instinct, and an honest throttle. While he respects automotive tech and innovation, his soft spot remains with no-frills, mechanical purity. He also harbours a long-standing fascination for a certain Bavarian brand with roots in aircraft engines. His idea of the perfect car? A rear-engined Porsche with timeless curves, naturally aspirated flat-six, and a manual gearbox. Off the road, Pratik is a loyal Chelsea FC supporter and backs Lewis Hamilton every race weekend.