Small (car) is beautiful

The Indian passenger vehicle industry has had a stellar year.

In 2023-24 (FY24), PV sales grew up by an impressive 9 per cent. Carmakers are now trying to assess where the next spurt of growth can come from. Will it be from small towns? Will it be from small electric vehicle (EV) buyers? "Smaller towns the next pit stop for carmakers", read one headline (Business Standard, March 18, 2024). "JSW MG Motor eyes a 'Maruti moment"", read another (Business Standard, March 21, 2024).

If you look at the sales numbers of various models, they tell an interesting story.

SUVs have been growing and are reported to account for almost half of all cars sold last year. The largest-selling model over the last few years has been Swift (in FY24, Wagon R seems to have scored a small win), and all others in the list of top ten cars are possibly bigger than the Swift.

Having worked on passenger vehicle advertising for more than 15 years (handling the Tata Motors account), I am often worried about the way carmakers are trying to 'upgrade' Indian buyers. There was a time when Maruti 800 was the dominant model, accounting for a market share of over 80 per cent. That changed with the launch of Hyundai Santro, Tata Indica and Daewoo Matiz. Suddenly, car buyers had a choice. Maruti saw the writing on the wall and launched Wagon R as a model that Maruti 800 users could upgrade to.

Then came the launch of the Swift, which became a runaway success. Maruti did not ignore the entry-level not feature in the top 10.