Maruti Suzuki SUV Cars

Maruti Suzuki is betting that a larger and more fuel-efficient version of its small hatchback, Alto, will entice buyers back into a segment that has long dominated Indian roads but has recently lost popularity to SUVs (SUVs).

Hatchbacks account for 38% of total car sales in India, but SUVs, that come with sporty body styles and features like in-car connectivity, was sold more during the last fiscal year as it accounted for around 40% of all car sales.

According to Shashank Srivastava, senior executive officer, marketing and sales, India’s largest carmaker hopes to halt this trend by targeting young buyers in large cities with its new Alto, which is larger than its predecessor, has a larger, one-litre engine, and more features.

“We have a bigger, more powerful car … and geographically also we are expanding the base,” Srivastava told Reuters ahead of the car’s launch on Thursday.

He stated that while smaller cities account for approximately 65% of Alto sales, Maruti is targeting buyers between the ages of 25 and 35 with the new model.

Maruti, which has Suzuki Motor Corp. of Japan as its majority stakeholder, is the dominant car brand at the entry-level, small car segment in India and its models such as the Alto, which has been a best selling car in this segment in the country for a number of years now. However, as a result of high inflation and other factors driving up car prices, the growth of small cars has slowed.

The affordability in this segment has come down for various reasons. The sensitivity to price rises is much higher,” he said. He also stated that the Alto is many buyers’ first car, a price conscious segment that Maruti will continue to target.

This segment will play a very important role in the future“, Srivastava said, adding that first time buyers make up 50% of cars sold in the country.

Entry-level vehicles such as the Alto at present account for about 15% of the total annual sales of the company, and Srivastava anticipates that this will increase with the new model.

According to Maruti, total car sales in India will increase to about 3.7 million this year, up from about 3.1 million last fiscal year. However, high inflation and material costs, supply chain disruptions, and new regulations could all have an impact.

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