Small cars are not dead: Maruti Suzuki’s R.C. Bhargava sees a sizeable market even in 2047

Maruti Suzuki India Ltd Chairman R.C. Bhargava has challenged the notion that small cars are losing relevance in India, saying the country’s large population will sustain a sizeable market for affordable, entry-level vehicles even as demand for SUVs grows.

India’s largest carmaker by volume sold 3,98,000 small cars in the first half of FY27, compared with 1,62,000 SUVs, Bhargava told reporters at a virtual press conference following the announcement of the company’s second-quarter results.

The automaker reported revenue from operations of ₹53,355 crore in the second quarter of FY27, up 26% from ₹42,344 crore in the year-ago quarter. Net profit, however, declined 26.36% to ₹2,466 crore.

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“Many people had been writing the obituary of small cars for the last two or three years, saying that all car buyers in India are highly aspirational and will only buy SUVs with the latest gadgets and features,” Bhargava said.

India will continue to have a sizeable small-car market because of its large population, he added, arguing that the country’s automobile market will accommodate both small cars and SUVs rather than shift entirely towards larger vehicles.

He expressed confidence that the segment will remain relevant over the long term. “Even by 2047, when India will be among the ranks of developed countries, there will be a sizeable small-car market in this country because we have a large population,” Bhargava said.

His comments come as rising consumer aspirations and changing preferences drive demand for SUVs, prompting automakers to expand their offerings in the segment. For Maruti Suzuki, however, small cars remain an important part of the business, particularly among price-conscious buyers.

Calling the GST 2.0 reforms a watershed moment for the Indian auto industry, Bhargava attributed much of the improvement in the sector’s performance to the changes introduced by the government on September 22, 2025. He said their full impact began to emerge in the current financial year as manufacturers increased production capacity and improved vehicle availability.

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India’s passenger vehicle market recorded its strongest-ever first-half production and domestic sales.

The growth came despite global geopolitical tensions, elevated raw-material costs and the challenge of absorbing higher input costs without passing on their full impact to customers.

According to Bhargava, the GST reforms helped revive demand, including among lower- and middle-income households whose aspirations for car ownership had been constrained by affordability concerns.

The Maruti Suzuki chairman also said rural demand continued to grow slightly faster than urban demand, extending a trend seen over several years.