Suzuki Eyes New Entry-Level Cars with Mild-Hybrid, CNG and Flex-Fuel Options for India

Banking on its strength in fuel efficiency and affordability, Maruti Suzuki is likely to introduce an entry-level car and explore a mix of powertrain options, including hybrids and flex-fuel, as the automaker looks to regain its 50% market share by the end of this decade.

In its FY30 Management Plan, Suzuki Motor noted that its product strategy for the Indian car market includes “rapidly develop and introduce entry segment products that meet the preferences of entry-model customers.”

The automaker highlighted the introduction of a unique entry-level car as part of its strategy to serve Indian consumers earning Rs 5-13 lakh annually and attract more first-time buyers. This car will have various powertrain options such as mild hybrid, CNG, and flex-fuel technology.

India’s passenger vehicle market is undergoing a slow growth phase due to a high base effect and sustained weakness in the small car segment. The slowdown reflects de-growth in the entry-level or small hatchback segment, which has been the segment that attracts many first-time buyers from the two-wheeler market.

Toshihiro Suzuki, president of Suzuki Motor recently said: “Small car sales are declining, but they will settle. When we look at Maruti Suzuki’s small car sales, they are comparable to the SUVs currently being sold by other manufacturers. I don't think the small car will cease to exist. As there are still 1 billion people who are yet to shift from a two-wheeler to a new car, they would need a four-wheel good car in the small car segment.” 

While demand for SUVs continues with modest growth in passenger vehicle sales, the small and affordable car segment continues its downward trend. Even with a car penetration level of only 34 per 1,000 people in India, the share of first-time buyers in the industry has come down to approximately 40%.

Maruti Suzuki’s management has continuously voiced the need to revive the small and affordable car segment for sustainable growth in the passenger vehicle industry. The automaker has seen its market share decline to around 41%, primarily due to weakness in the small car market, which has been its stronghold.

Though Maruti Suzuki has launched a decent share of the SUV market recently , growth in the small cars market is crucial for the automaker to regain its 50% market share. 

In a recent interaction with Autocar Professional, Maruti Suzuki Chairman RC Bhargava said the overall growth of the passenger vehicle industry can be robust only if small cars generate demand. “We will continue to make as many small cars as the market can pick up,” he said.

Buyers in the entry-level car segment are susceptible to acquisition and running costs. Substantial increases in the price of these cars over the years have been disproportionate to the rise in income levels for the buyers in this category post the BS-VI emission and safety norms. 

Bhargava mentioned that affordable cars with higher fuel efficiency are needed to make them more attractive to consumers in the segment, especially those upgrading from two-wheelers. “We need an affordable car that drives 30-40 kilometers on a liter of fuel,” he said. 

Currently, Alto K10 is the most affordable model in Maruti Suzuki’s portfolio, with a starting ex-showroom price of Rs 4.10 lakh, followed by S-Presso at Rs 4.27 lakh. Most OEMs have exited the Rs sub 5 lakh car market.