Indian Economy News

Indian small car exports thrive as domestic demand shifts to SUVs

According to a report, smaller cars manufactured by Maruti Suzuki, Hyundai, Kia, Citroen, Volkswagen, Honda, Nissan, and Renault are gaining traction in international markets as domestic demand in India shifts towards SUVs and larger vehicles with advanced features. The once-dominant small car segment now holds less than 30% of India's total passenger vehicle (PV) market, impacted by the rising popularity of SUVs and sedans in recent years. In FY18, small cars accounted for 47.4% of India's PV market share, which declined to 46% in FY19 and 46.5% in FY20. Conversely, the SUV segment's contribution to the total PV industry reached 53.6% in FY24.

In FY24, Maruti Suzuki exported 280,000 cars, including models like the Swift Dzire, S-Presso, Baleno, and Swift, to markets such as South Africa, Saudi Arabia, Chile, Mexico, and the Philippines. Hyundai also exported sedans like Verna and Aura, along with the Grand i10Nios, to various destinations, including South Africa, Saudi Arabia, Mexico, Chile, and Peru. Executives from Maruti and Hyundai have reported robust demand for these smaller models overseas and anticipate this trend to persist, with the potential for a resurgence in demand within India as well. Despite the prevailing trend favouring larger vehicles, automakers remain hopeful about the revival of the small car segment, citing a potential resurgence driven by factors like the rebound in the two-wheeler market and anticipated improvements in affordability by the end of 2026 or 2027, despite challenges posed by rising hatchback prices due to safety and emissions regulations.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.