THE COMPACT ROAD RUNNER

WITH SHARPER PRICING AND A STRONGER EXPORT PUSH, RISING HELMET COUNTS OUTSIDE CAR SHOWROOMS ARE GIVING MARUTI FRESH OPTIMISM.

- BY RISHI KANT

IN APRIL 2022, India's automobile sector struggled as car sales dropped due to the pandemic and stricter Bharat Stage-VI emission norms. Maruti Suzuki chairman R.C. Bhargava lamented the situation, stating that the small car market, once the “bread and butter” of India, was in decline. "The butter has gone away, now it's only bread," he said.

Three years later, the tide is turning, especially after the epochal Goods & Services Tax (GST) reforms, which, among other things, slashed the GST rates on small cars from 28% to 18%. "The government has always been conscious of sustainability. This is not the first time small cars have been encouraged," Bhargava says. "It was in 2006 when the definition of small cars was brought in, and excise duties on small cars were reduced."

The key architect of India's automobile revolution explains the government's rationale in 2006. "Only because of fewer emissions, fewer material requirements, and less space. We are a congested country. How much more congested would our roads become if, instead of 34 cars per 1,000 people, we had 300 cars per 1,000 people, which is not an unusual number?"

Bhargava has always been of the view that car penetration in India is abysmally low compared to other markets, especially in Southeast Asia, where it is at the 300-level. "Malaysia has almost 400-500 cars per thousand. There is huge scope and need for growth," he says.

The nonagenarian stresses that India needs to convert its 28 crore (280 million) scooters plying on roads to something more convenient for people, "whether it be individuals' own cars, or shared mobility".

"But the means of travel, the means of commute for people, have to change. It cannot be this unsafe and an inconvenient means of transport," he adds.