Maruti Suzuki India (MSI) Chairman RC Bhargava said on Tuesday that the decline in sales of cars priced below Rs 10 lakh is a matter of concern. At one time the share of these cars in total sales was 80 percent, but now it is continuously decreasing. He said that the reason for this is that people have less disposable income. Bhargava said, “Overall, the car market is not growing overall due to lack of sales in this segment. For the market to get back to this level of growth, people need to have more disposable income.
14% growth expected in festive season
However, the company expects overall retail sales to grow by 14 per cent during the festive season,” he said in a conference call with reporters on the quarterly results. “The truth is that cars priced below Rs 10 lakh are not selling well. The market is not growing. In fact, it is declining. This is a matter of concern, because unless this segment of the market grows, the overall growth will be affected.
Now the stake is less than 50%
According to SIAM (Society of Indian Automobile Manufacturers) data, the market share of cars priced below Rs 10 lakh was 80 percent in 2018-19. During that period, wholesale sales of passenger vehicles in India was 33,77,436 units. The share of passenger vehicles priced below Rs 10 lakh is now less than 50 per cent in the market. In the financial year 2023-24, wholesale sales of passenger vehicles in the country reached a record high of 42,18,746 units. Bhargava said, “The market for this segment is not growing at present. This is a cause for concern. The truth is that the increase is happening only in expensive cars. I guess it doesn’t make me very happy.”
What is the reason?
He was asked whether the slowdown in the domestic passenger vehicle market was a cause for concern. Maruti Suzuki India has traditionally been the leader in the small and compact car market. But now sales are not increasing in the vehicle segment priced below Rs 10 lakh. When asked what is the reason for the decline in sales of vehicles priced below Rs 10 lakh and why people are not buying cars in that category, he said the reason is a matter of ‘affordability’. People are not able to buy due to low disposable income. Asked whether some stimulus was required from the government to boost sales in the sector, he said, “I don’t know what is required, but we need people who have more disposable income.” Talking about sales during festivals, Bhargava said it has been ‘very good’. “From the end of Shraddha till the end of Diwali, our retail sales are expected to grow by about 14 per cent as compared to the same period last year,” he said.
