KEY HIGHLIGHTS
- In the last few years, many small cars have stopped featuring in the Top 20 sellers lists.
- Most manufacturers are shying away from the small car segment.
- Cheaper EMIs and longer tenures have resulted in people spending on higher-segment cars.
THe small car category used to be the backbone of the Indian automotive industry; there was a time when cars like the Maruti Suzuki Alto, Celerio, WagonR, the Hyundai Santro, Daewoo Matiz, Tata Indica and many others were very common sights on Indian roads. Some of these cars even featured regularly on the Top 10 sellers every month. However, today, most of these cars have been discontinued, and the ones that remain in existence have been pushed away by the horde of compact SUVs.
The question that we have here is that whether small cars are truly disappearing from the Indian market, or is there some hope for them? We'll be looking at all the reasons, all the possibilities but first, make sure to join the 91wheels WhatsApp Community to keep up with the latest news and updates in the automotive space.
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Small Cars: A Look At Some Of Them
The small car segment has shrunk today. Today, the Maruti Suzuki Alto K10, the Celerio, S-Presso, and the Renault Kwid are the only few ones that can truly be considered as small cars, and only the Alto K10, despite being in a state of decline, is selling in somewhat decent units.
The fact that Renault has basically confirmed that there is no new-generation model planned for the Kwid, and that the current-gen will continue to be sold till the end of its production run suggests that Renault too may end up leaving this segment in a few years.
Body Style Distribution
If you notice in the last few years, there has been a shift in distribution between body styles. As per a report from December 2021, small cars accounted for 40% of sales in the Indian car market, while SUVs were still catching on at 36%. Cars like the Maruti WagonR, Swift, Baleno, and the Alto were in the Top 10 sellers list.
However, three years later, and December 2024 showed us a far bigger change in the numbers. SUVs have overtaken every other segment, grabbing a majority share of 52%, while hatchbacks accounted for just 20% of sales in the Indian car market. MUVs and Sedans made up for just 18% and 10% respectively.
Performance in December 2024
During this time, mid-size SUVs and compact SUVs grabbed a majority share of car sales in the Indian market. Many of these SUVs also received major upgrades with important feature additions, while some others, like the Ford EcoSport, Renault Duster, and the Nissan Kicks made their place in the list of discontinued cars.
At 17,336, the Maruti Suzuki Brezza became the highest-selling car overall in December 2024. The second spot, unsurprisingly was occupied by a small car; the WagonR, which wasn't too far behind at 17,303 units. The only sedan in this list, the Dzire, secured third place with 16,573 units sold, while the Ertiga and the Punch occupied the fourth and fifth spots respectively at 16,056 and 15,073 units sold.
The Tata Nexon came in at sixth place overall at 13,536 units while also coming in second in the compact SUV segment. The Hyundai Creta, Mahindra Scorpio, Maruti Suzuki Eeco, and the Maruti Suzuki Fronx rounded up the remaining positions to round off the top 10 sellers in December 2024.
If you notice, among the top 10 sellers in December 2024, six of them belonged to the mid-size, compact, and even full-size SUV categories. Meanwhile, once the highest-selling car in the market and among the only few small cars in the list, the Maruti Suzuki Alto had to make do with the sixteenth spot, selling 7,410 units.
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Performance in January 2025
January 2025 threw in quite some surprises in the Top 20 sellers list. The Maruti Suzuki WagonR reclaimed the top spot, selling a whopping 24,078 units. The Baleno has come in second, but at 19,965 units, the margin between the first and second spot is quite significant. However, the Baleno saw quite the jump up compared to its performance in December 2024, when it sold 9,112 units.
Among small cars, the Swift also fought back rather strongly, finishing fourth with 17,081 units, seeing a jump compared to December 2024 when it ended up at the eleventh spot, behind the Fronx by just a narrow margin. Meanwhile among SUVs, the Hyundai Creta claimed the third spot at 18,522 untis, while the Punch, Scorpio, Nexon and the Fronx continued to mark their presence among the top 10 sellers. Interestingly, the Grand Vitara also entered the list, jumping up from 7,093 units in December 2024 to 15,784 units in January 2025.
January 2025 also saw some relief for the Maruti Suzuki Alto, as it also fought back, jumping up to 11,352 units. Meanwhile cars like the S-Presso, Celerio, and even the Ignis saw a jump up in sales, on a month-on-month basis. The Dzire continued to be the only sedan among the top 20 sellers in January 2025, while MPVs such as the Ertiga, Eeco, and the Innova Hycross moved further down the list.
In terms of body style distribution, the hatchback segment saw some sort of resurgence, grabbing 26% of market share; 6% more from what it was in December 2024. Meanwhile, the SUV market share fell down by just 2% in January 2025, compared to the 52% share it had in December 2024. While the market share for MPVs grew from 16% in December 2024 to 18% January 2025, the market share for sedans fell from 10% to 8%.
However, this re-emergence of small cars has not been rapid. Rather, small cars continued to grab market share consistently through October and November 2024, growing in small percentages.
The Takeaway
Is India ever going to let go of small cars? It is truly difficult to answer this question. One reason small car sales have been declining over the years is due to the innovations taking place in the sub-4M category. It began with the Tata Indigo CS from back in the day, eventually resulting in the segment that consists of the Dzire, the Honda Amaze, Hyundai Aura, and the Tata Tigor. Meanwhile, the sub-4M SUV has seen soaring success, which we all know.
Even though the Maruti Suzuki WagonR is a top choice for cab operators and drivers, there is no denying the fact that it is a small car after all, and many families also continue to swear by one even today. The Swift, launched nearly 20 years ago, also continues to be immensely successful for the car maker even today, while its rivals like the Grand i10 Nios and the Tiago are nowhere to be seen among the Top 20 sellers.
It is also important to note that Maruti Suzuki is the only player in the small car segment with multiple products in the small car segment. A key factor has to be that the car maker has the largest service network, and its cars are not only reliable but they are also light on the wallet; something that many first-time buyers consider even today.
What's Next?
It's not that innovation hasn't taken place in the small car segment; the Tata Tiago is sold with multiple fuel options; petrol, CNG and even electric, and Hyundai also sells a CNG version of the Grand i10 Nios. Maruti Suzuki also sells CNG versions of the Alto K10, Celerio, S-Presso, WagonR, and the Swift.
According to reports, Maruti is developing a new entry-level car with mild-hybrid, flex-fuel and CNG possibilities. An all-electric entry-level car is also said to be under development which will likely make its debut in 2028. Hyundai, too, will also likely be working on an all-electric version of the next-generation Grand i10 Nios.
Verdict
The answer that seems to be emerging right now is that small cars are still quite relevant even today, despite the emergence and hype around compact SUVs. More innovation in the small car space needs to take place, and more importantly, it needs to come with a good balance of features, performance, economy, and cost-sensitvity as well. Reliability too is a major factor, and as of now, there is just no beating the likes of Maruti Suzuki and Hyundai.
