Challenges Ahead: Small Cars and Income Gap in India's Auto Sector

Maruti Suzuki Chairman R C Bhargava discusses the challenges faced by India's small car market due to rising costs and income disparities. He emphasizes the need for government intervention to make cars affordable for the majority, while also planning to boost exports amidst domestic market challenges.

Maruti Suzuki India Chairman R C Bhargava has raised concerns over the state of India's small car market, citing income disparities as a key barrier to growth. Despite income tax reliefs on earnings up to Rs 12 lakh, he doubts demand will revive without significant government intervention.

Bhargava pointed out that only 12% of Indian households are above the Rs 12 lakh income bracket, with the rest struggling to afford cars priced at Rs 10 lakh and above. This economic disparity is stunting the expansion of the country's automotive sector, despite the company's strong export plans.

He called for reduced taxation and acquisition costs to stimulate the small car segment. Maruti Suzuki aims to increase its export share as domestic demand remains weak, while the company plans to introduce more SUVs and adhere to new safety standards by implementing six airbags in all models.

(With inputs from agencies.)