Mini cars stall as some can't afford them, some want more

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₹10 lakh bracket, but the product has to be right." Banerjee said Maruti has "made significant investments" in the entry-segment too, like upgrading the K10B engine to K10C, which powers the Alto K10 and Celerio models. “If many of our competitors feel SUVs is the bigger segment, we feel there is an opportunity in hatchbacks also as India's economy grows", he said. Hatchbacks fetched 45% to Maruti's overall sales in FY24, and nearly 50% in April this year.

Banerjee said this contribution may eventually fall and settle at a lower level, but its overall volumes should continue to grow. Many entry-level buyers weren't in a position to buy, and only SUV buyers were in the market which skewed this split over the last few years, Banerjee added. "If after two years now, when the hatchback buyer comes to the market, their contribution may come back.

Car penetration in India is at 32 per thousand, while in mature markets it is over 600. The next decade is of India, and its growth will increase car penetration. There is a huge chunk of people sitting in the two-wheeler user base who will enter the four-wheeler market.

Everyone can aspire to large SUVs, but will need a stepping stone - and that stepping stone will be a hatch," Banerjee said. Over the last few years, the entry price point of first-time buyers has moved up due to improving consumer aspirations, said Jay Kale, senior vice-president, Elara Capital. "New model launches in a segment help triggering a consumer purchase decision.