Indian small car exports thrive as domestic demand shifts to SUVs

Smaller Made in India cars from Maruti Suzuki, Hyundai, Kia, Citroen, Volkswagen, Honda, Nissan and Renault are finding markets abroad as domestic demand turns to SUVs and large, feature-packed vehicles, the Times of India reported.

The small car segment, which once dominated India's passenger vehicle (PV) market, now holds less than 30 per cent of the total market share, as SUV trends have impacted the sales of compact cars and sedans in recent years.

In the financial year 2017-18 (FY18), small cars accounted for 47.4 per cent of India's total PV market share. Their number declined to 46 per cent in FY19 and then to 46.5 per cent in FY20.

In FY24, the SUV segment contribution to the total PV industry stood at 53.6 per cent.

Exports of small cars

In FY24, Maruti Suzuki shipped 280,000 cars to destinations like South Africa, Saudi Arabia, Chile, Mexico, and the Philippines. This includes the Swift Dzire, S-Presso, Baleno and Swift models.

Hyundai also exports sedans like Verna and Aura, along with the Grand i10Nios, to markets including South Africa, Saudi Arabia, Mexico, Chile, and Peru.

According to the Economic Times, Maruti and Hyundai executives have said they are witnessing a high demand for these smaller models abroad, and expect this trend to continue to grow. Adding that there is also potential for demand to resurge in India as well.

Revival for Small Cars:

Despite this growing trend towards larger cars in India, automakers are optimistic about the revival of the small car segment, citing a resurgence in the two-wheeler market, which had been declining since 2018-19.

The rise in hatchback prices due to safety and emissions regulations also led to a drop in affordability for small car buyers. However, automakers are optimistic that the hatchback segment will revive by the end of 2026 or 2027.