Stuck in first gear: Let's probe what ails car sales

Maruti Suzuki's call for small-car sales incentives can be easily dismissed, but not what it says about the market's shape. Volumes seem at risk of hitting a premature plateau in India

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For decades, small cars drove India's market for passenger vehicles. But this has changed in recent years. So much so that our largest car manufacturer, Maruti Suzuki, has rung an alarm bell. A senior executive for marketing and sales, Partho Banerjee, has said a sales revival in this segment would need incentives. True, lower on-road prices would make small cars more affordable for users of two-wheelers looking to upgrade. By one reported estimate, from close to a million cars priced under ₹5 lakh a decade ago, this segment has seen unit sales shrink to a thin slice of a market that saw as many as 4.3 million passenger vehicles roll onto Indian roads in 2024. This drastic drop in the offtake of entry-level cars also explains a plateau that overall numbers might be at risk of reaching. Last year's market was only some 4% larger than it was in 2023. While the Indian economy's recovery from the pandemic saw the sales of pricier four-wheelers surge, low-priced cars trailed off. No doubt, some first-time buyers would have opted directly