Hatchback Segment To Regain Sales Momentum: Partho Banerjee

The hatchback segment in India in the last few years has observed a small shink-down, owing to the increased demand for SUVs in the market. The shift in dynamics has had a major impact on the car scene in the country. However, one of the best-selling hatchbacks in the country - the Maruti Suzuki WagonR, has completed 25 years in our market with a cumulative sales of 32 lakh units. To celebrate the momentous occasion, we got the chance of an exclusive conversation with Mr. Partho Banerjee, Senior Executive Officer, Marketing and Sales, Maruti Suzuki India Limited. During the conversation, he affirmed that he believes the hatchback segment will recover eventually.

Future of hatchbacks

Upon asked to comment on the future of hatchbacks, Partho Banerjee said, "We believe the segment is shrinking because those who can afford to buy cars are looking for options with more features and more space. Conversely, those who cannot afford these vehicles aspire to upgrade to a four-wheeler. Unfortunately, due to rising vehicle prices caused by regulations and other factors, these options have become out of reach for many. This is why this segment is not able to grow."

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He further added, "As I mentioned earlier, we expect a recovery to occur eventually. When it does, the share of the hatchback segment will rise. It is unlikely that the SUV segment will continue to grow indefinitely; it may ease out around 70%, 71%, or 75%. At that point, the hatchback segment will begin to grow again."

Elaborating on the topic further, the senior Maruti Suzuki official mentioned that presently the car park in India is at 32 cars per thousand people. In other terms, there are many potential car buyers in India. Many of these buyers are expected to step into the world of cars with the purchase of a hatchback instead of a relatively more expensive SUV or a premium model.

Timeline of recovery

Talking about the timeline of the recovery of hatchback sales, Banerjee said, "R.C. Bhargava San has forecasted that the hatchback segment may rebound by the end of 2026 or early 2027, primarily due to increased affordability as salaries are expected to rise. If we compare the prices of hatchbacks from the 2018-19 period to those in 2023-24, we find that the weighted average price increase has been around 60%. However, over the last five years, income levels for this customer demographic have not increased by 60%, which presents a significant challenge."

Maruti Suzuki's first EV coming soon

Partho Banerjee also talked about the launch of the first electric SUV of the brand in the Indian market. Although, he refrained from sharing the details. He confirmed that the automaker will soon share plans of not just launching a new product but a new ecosystem with it.