Maruti to shift focus to high-end cars as demand for hatchbacks shrinks

There has been a 25% decline in the market for hatchbacks in the last four years due to increase in commodity prices and taxes by state governments

Maruti Suzuki India Ltd., the nation’s biggest carmaker, will shift its focus to higher-end passenger vehicles as small cars -- its main source of income -- become more expensive and demand for them shrinks.

“Small cars used to be our bread and butter,” Maruti Suzuki India Chairman R.C. Bhargava said in a post-earnings media call. “There’s no butter in small cars anymore. We will have to change our strategy. People with limited income are getting squeezed out of the car market due to higher cost,” he said, adding the market for hatchbacks is “shrinking significantly.”

There has been a 25%