Maruti Suzuki prioritizes mini cars over bigger models

Maruti Suzuki India Ltd, India’s largest automaker, is prioritizing production of small cars like the Alto and Spresso, even if it means reducing production of larger models, as it believes there is still growth potential in the world’s third-largest auto market.

Minicars such as Alto and Spresso showed strong growth, with sales nearly doubling in December, the New Delhi-based automaker said on Thursday. The company is ramping up production of these vehicles to meet increased retail bookings with the recent goods and services tax (GST) cuts.

Mini car shipments to dealers in December rose 92% year-on-year to 14,225 units, and Maruti’s total domestic sales rose 36% to 192,115 units during the month. The large commercial vehicle portfolio grew by 33% annually, reaching 73,818 units.

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According to a senior executive, after October and November wholesale sales data showed a moderate performance, mini car production is gradually being increased, which is reflected in December sales figures.

“There were a lot of questions as to why this segment was not growing. I would like to clarify that these are wholesale sales figures. We were doing quite well in retail sales numbers in the last two months,” Partho Banerjee, senior director, marketing and sales, said at a press conference on Thursday.

Banerjee added that while the company was in a hurry to deliver such small cars to dealerships, it had to sacrifice production of some other models in segments such as compact vehicles due to limited capacity.

“If we are producing more small cars, we have to sacrifice some other models. So, we are trying to produce the models and deliver them to the customers so that we can serve our customers step by step,” Banerjee said.

Undoubtedly, Maruti Suzuki has an annual production capacity of 2.6 million passenger vehicles at four plants in Haryana’s Gurugram and Manesar and Gujarat’s Hansalpur and Kharghoda.

Maruti, which has been offering huge discounts since early September in addition to GST cuts as part of its strategic pricing, is now considering whether to continue these prices as demand for its cars has increased in recent months.

“We will take a decision soon,” Banerjee told reporters.

falling demand

The spotlight has been on the mini car segment since the rationalization of the GST rate, as demand has declined over the last few years as consumers shift towards sports utility vehicles (SUVs). Since 2019, SUVs have risen from one in five cars on Indian roads to one in two; Small cars suffered from this.

Questions on whether the GST cut will revive the mini car segment have increased, especially after the release of October and November data by the industry’s leading lobby group, the Society of Indian Automobile Manufacturers (Siam). //history//.

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During the October-November period, Siam data showed that minicars rose cumulatively by just 3% year-on-year to 22,415 units, while compact SUVs less than four meters in length increased by 17% (to 207,180 units).

Despite strong growth in December, minicars still face a steep climb on the road to recovery, having been hit the hardest in several years. Between April and December, Maruti saw a 15% decline in mini car sales to 76,044 units, as the compact hatchback and utility vehicle segments continued to grow.

However, Maruti’s management is confident that there is still room for growth in the segment. “Although we are seeing growth in sales, we have bookings that are pending for more than 1.5 months. This month, sales have doubled, but the backlog for mini segment vehicles remains around 1.5 months,” Banerjee said.

Discussions on the future of the mini car segment have also attracted attention due to the ongoing debate among automakers on whether cars weighing less than 909 kg should get special exemptions under the upcoming emission norms. It is noteworthy that all minicars fall below this weight threshold.

While automakers such as Tata Motors, Mahindra and Mahindra and Hyundai Motor India have opposed such weight-based discount, Maruti has consistently argued that small cars deserve special exemption; otherwise it would be difficult for them to survive in the Indian market.

GST increase

Analysts had earlier stated that there was still some hope left for the segment as growth would gradually improve post-GST cuts.

Puneet Gupta, director of market analytics firm S&P Global Mobility, had earlier explained that growth in the sector will emerge in phases and the current momentum will be largely driven by buyers already active in the market.

These consumers have now moved upmarket and have moved decisively towards subcompacts and compact SUVs.

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“However, from April-May 2026, entry-level and mini cars may witness a revival if consumers see meaningful pricing for the segment. The comeback of this segment will depend on the intensity of OEM (Original Equipment Manufacturer) commitment to revive demand,” he said, adding that Maruti Suzuki will play a decisive role in this shift.