The Indian passenger vehicles segment is expected to touch record sales this fiscal and follow it up in 2023-24 with an 8 per cent growth, Maruti Suzuki India Ltd Chairman R C Bhargava said on Friday.
In a virtual press conference on the company's second-quarter earnings, Bhargava said several factors such as easing of semiconductor shortage, restoration of supply chain after the disruption by COVID-19 pandemic besides a better economic growth prospect in India are propelling automobile sales although small cars sales are gradually declining.
"The (India) economy is doing pretty well better than anywhere else...the automobile sector (passenger vehicles) has now got to a stage this year where it will be close to the levels which we had reached in 2018-19, which are the highest ever," he said.
Bhargava further said for Maruti Suzuki India Ltd (MSIL), it "will be roughly in the same order as they were in 2018-19" and "the industry will be ahead of 2018-19" as the smaller car segment has had a degrowth while the bigger SUVs have grown.
In 2018-19, as per the Society of Indian Automobile Manufacturers (SIAM) data, total sales of passenger vehicles (PV) in the domestic market were at 33,77,436 units, while MSIL sold 17,29,826 units.
"Although we have also started growing in that segment (SUVs), our growth figures will reach the 2018-19 figure, whereas industry will have gone a few percentage points above 2018-19," Bhargava said.
He further said, "We expect that next year this trend will continue. The hatchback sector will still continue to show degrowth but (PV) industry as a whole in the country will have a growth rate, which looking at all the parameters today, could be somewhere around 8 per cent...and Maruti will be more or less around that figure..."
"The industry will go to 8 per cent which to my mind is a good thing because it's after a long time that the auto industry will be finding a growth path in the future," Bhargava said.
On the performance of the hatchback segment, which has been the company's bread and butter, he said, "This quarter too, the hatchback segment has found growth. I think that is limited to this festival season. I don't expect that hatchback growth to continue, subsequent to this quarter or in the next year."
Bhargava further said, "Everywhere, where hatchbacks are sold whether it's in urban areas or the rural areas, the ability of people to buy hatchbacks has eroded and therefore the growth of hatchbacks is not happening."
The Indian PVs segment, he said, is moving away from a market which was predominantly small car, hatchback to a market which is more in the upper segment, mainly SUVs.
Although Maruti Suzuki is gearing up to meet the new trend, Bhargava said the company is not getting out of the small car segment as it is still a substantial segment of the overall PV market.
"It's not that we are getting out of the hatchback segment or the entry car segment," he said, asserting the company would continue to introduce new products in the small car segment.
From around 70-75 per cent of the PV market, the share of small cars has declined to around 60 per cent as SUV sales have grown.
On electric vehicles, Bhargava said MSIL is gearing up for its first product launch sometime in 2025 and ensuring that customers don't have any product, service or charging related issues in a systematic manner through localisation of production and more components.
"We're looking to see how the infrastructure is developing...," he added.