Entry-level cars out of most Indians’ budget, says Maruti Suzuki chairman

RC Bhargava, chairman of Maruti Suzuki India Limited (MSIL), said that most Indians can no longer afford to buy even a basic car. He was addressing reporters during the company’s post-results press conference.

Bhargava noted that car purchases are now largely restricted to the top 12% of Indian households, while the remaining 88% are unable to afford even small cars. “How can you get high car sales growth if 88% of the country is below the income level needed to buy cars costing ₹10 lakh and above? The smaller, cheaper cars have become unaffordable for these people,” he said.

MSIL posted a year-on-year decline in net profit for Q4 FY25, reporting ₹3,711 crore. Its revenue from operations during January-March 2025 rose to Rs 38,848.8 crore, compared with Rs 36,697.5 crore in the year before. 

Bhargava highlighted the drop in small car sales. He noted the sales of small cars like sedans and hatchbacks have declined by about 9%, an if there is a 9% decline in the segment that caters to 88% of the population, where will the growth come from?

However, the picture isn’t entirely positive even at higher income levels. “Only about 12% of Indian households earn more than ₹12 lakh annually,” he said. “To buy a car costing ₹10 lakh or more, you need to fall into this income bracket. Car buying in India is largely limited to this 12%.”

He also addressed the perceived shift in consumer preference from small cars to SUVs. “It’s a fallacy to think that the decline in the small car market and the growth of the SUV market are purely a result of changing aspirations or a desire for bigger vehicles,” Bhargava said.

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