Maruti Suzuki India (MSIL) Chairman RC Bhargava on Tuesday said that declining sales of cars priced under ₹10 lakh in the country is worrisome as overall growth in the car market was taking a hit due to that.

“The fact that the market for under ₹10 lakh (cars) is not growing... in fact it’s declining, is a cause of worry, because unless that lower-end of the market grows, there is going to be no feeders into the upper market,” Bhargava told reporters on a virtual call on Tuesday.

He noted that the market for under ₹10 lakh cars in 2018-19 was 80 per cent of the total car market in India. The fact that this segment was not growing was, therefore, a cause of concern. In 2018-19, total passenger vehicle wholesales in India stood at 33,77,436 units as per data from Society of Indian Automobile Manufacturers (SIAM).

At present, the sub-₹10 lakh segment accounts for less than 50 per cent of the overall market. In 2023-24, the total passenger vehicle wholesales number touched a record high of 42,18,746 units in the domestic market.

“It is not the overall slowdown, but the segmentation which has happened,”he said, adding that he’s not particularly happy that growth is taking place only in expensive cars segment.

Between April and September this year, MSIL sold 61,787 units of its mini segment (Alto and S-Presso) in the domestic market, a decline of around 15 per cent as compared with 72,550 units in the same period last year. Domestic wholesales (dispatches to dealers) of compact segment (Baleno, Celerio, Dzire, Ignis, Swift and WagonR) also declined by 12.5 per cent to 3,66,421 units as against 4,18,929 units in April-September 2023.

The main reason for people not buying sub-₹10 lakh segment was also because of “affordability” factor (as cost has risen), Bhargava said adding that “we need people to have more disposable income.”

Commenting on the festive sales, Bhargava said these have been “pretty good” and the new inquiries, and the bookings have also been better than last year, though by not a big margin.

“We look forward to a reasonable quarter where we should continue with our growth but that growth is not going to be very much different....between three and four per cent (for the overall fiscal),” Bhargava said adding that new bookings have crossed over 4.15 lakh. The order book, therefore, looked quite healthy.

Partho Banerjee, Senior Executive Officer, Marketing & Sales, MSIL, also said that this October will be see the highest sales for the month of October in the history of MSIL with over two-lakh deliveries (retail sales).

“Last highest October was in FY20-21 with 1,91,476 units retailed. On Dhanteras, we did around 32,000 deliveries but since Dhanteras will continue on Wednesday till 2 pm, we expect to deliver another 10,000 units. So total Dhanteras sales will be around 42,000 units,” Banerjee added.