Carmakers Tend To Exit ‘Under Rs 5L’ Segment, But Maruti Won’t. Why? Chairman Answers

Even though the market share of cars priced below Rs 5 lakh has shrunk from 25.8 per cent in FY19 to Rs 10.3 per cent in FY22, Maruti Suzuki chairman RC Bhargava believes that maintaining "this large-sized market" is important for the growth of the country.

New Delhi: RC Bhargava, the chairman of Maruti Suzuki, has an optimistic view about the market for cars priced below Rs 5 lakh in India, even as rivals tend to exit the segment owing to a fall in demand. True, the market share of cars priced below Rs 5 lakh has slumped from 25.8 per cent in FY19 to just 10.3 per cent in FY22, according to a Business Standard report.

But the octogenarian, who sits at the helm of India’s largest car making company, said that the automaker will play a major role in the Rs 5 lakh car segment in the coming years.

“I’m confident that this downturn in the small car market is a temporary phenomenon. I believe in the long term, this market cannot be kept down – it has to grow, otherwise India will not grow. And what will happen to make it grow is per capita incomes have to go up, and maybe some way, the prices have to come down. But there is no way that the country can ignore this large-sized market and not allow them the benefits of growth in the country”, the Mint quoted RC Bhargava in a report.

According to the report, RC Bhargava also pointed out that the lower end of the market has been hit the most because the percentage increase in price of cars has been maximum at that level. He said the “230 million scooter customers are very much there” adding that because of the price increase (of cars in the Rs 5 lakh segment) people are not being able to afford cars. Bhargava targets that section of the Indian population — closely relatable to Ratan Tata’s idea of unveiling the Tata Nano, targeting a similar section of the Indian society.