Maruti Suzuki to Equip All Cars with Six Airbags This Year, Says Chairman Bhargava

Maruti Suzuki India Ltd, the country's largest car manufacturer, will equip all of its vehicles with six airbags in the ongoing year, aligning with the government's ongoing efforts to enhance passenger safety, the company's Chairman RC Bhargava said on Thursday.

"We will be having six airbags in virtually all our cars this year," Bhargava said during a media interaction to discuss the company's financial performance for the March quarter. "From the safety point of view, the government was very keen that six airbags should be in all cars. We will implement this desire of the government and that will help us."

The Resistance

In 2022, the car industry, and particularly Maruti Suzuki, had expressed reservations about a government proposal to mandate six airbags in all passenger vehicles. The primary concern was the potential price increase for entry-level models, which could impact affordability and sales in the mass-market segment.

Prior to the six airbags rule, the car industry had already weathered a series of cost-driven regulatory transitions, including mandatory dual airbags in 2021, the move from BS-IV to BS-VI emission norms, and mandatory three-year insurance cover—all of which have raised vehicle prices. The COVID-19 pandemic and subsequent global chip shortages further disrupted production and sales.

India is a price-sensitive market. Yet, the demand for small cars has been falling for the last few years. Rising prices of raw materials and taxes have made them costlier, putting them out of reach for people who are looking to upgrade from two-wheelers. Fuel prices have shot up. For most Indians, incomes have been stagnant because of the prolonged economic downturn. And those who can afford it are looking to upgrade to sedans and utility vehicles, further shrinking the small-car market.

Small Car Sales

In the earnings call on Thursday, Bhargava raised concerns over the continued decline in small car sales, warning that unless affordability is restored in this segment, overall passenger vehicle growth in the country will remain subdued. Maruti Suzuki reported a modest 2.7% domestic sales growth in FY25, with small car sales falling by 9% during the year.

Bhargava said it's a fallacy to believe that the decline in the small car market and the rise of the SUV segment are due to changing consumer aspirations. "What's happening is people can't afford small cars anymore," he said.

Bhargava pointed to income distribution as a critical factor limiting growth. "Only around 12% of households in India earn over Rs 12 lakh annually and can consider buying a car priced at Rs 10 lakh or more," he said. "Car buying in India is largely restricted to this 12%. How can you expect growth when 88% of the country is at a level where they cannot afford these cars?"

The chairman argued that the real issue lies in the regulatory environment, which has increased entry-level car prices. "Cheaper cars have become unaffordable because of the high cost of implementing regulatory measures," Bhargava said. "For car sales to revive, small cars must become more affordable — that requires lower taxes and a reduction in the cost of regulations."