The country’s largest car company Maruti Suzuki is preparing to launch a new entry-level car, whose price can be less than Rs 4 lakh. This car will be made especially keeping in mind the first-time car buyers and will have many engine options like hybrid, flex-fuel and CNG.
The country’s number one car company Maruti Suzuki India has the largest portfolio. The company has the largest number of models in the hatchback, SUV and MPV segments, which also includes many affordable vehicles. The cheapest car in the country, S-Presso (priced at Rs 3.50 lakh) is also from Maruti. Apart from this, the company sells several low-cost models like Alto (price Rs 3.70 lakh) and Celerio (price Rs 4.70 lakh). At the same time, the ex-showroom price of WagonR and Swift, which rule the hatchback segment, is also less than Rs 6 lakh. Despite all this, now the company is planning to launch a new entry-level car, which will be especially for first-time car buyers. If this becomes a new entry-level car in the company’s portfolio, its price could be less than Rs 4 lakh.
The company aims to re-strengthen its hold in the small car segment. The company has said that this model will be specially designed for India and it will be offered with many powertrain options like mild-hybrid, flex-fuel and CNG. The move comes at a time when Maruti is focusing more on price and accessibility for customers transitioning from two-wheelers to cars.
Prices of small cars reduced due to GST 2.0
The company wants to increase its share among first-time car buying customers by offering lower prices, better mileage and alternative fuel options. After the implementation of GST 2.0 in September 2025, initial good signs of this strategy are visible. Under GST 2.0, the tax rate on cars smaller than 4 meters was reduced from 28% to 18%. This brought the prices of entry-level segment cars within the reach of common people and increased the interest of buyers again.
Maruti’s 7.6% growth in 11 months of FY 2026
According to information shared by the company with investors, the share of first-time car buyers increased to 48% in the September-December 2025 period, from about 40% in the April-August period. This shows that there has been a clear improvement in the demand for cars among low budget customers. However, despite the improvement in overall car sales, the small car segment is still facing pressure. In the first 11 months (April-February) of FY26, Maruti Suzuki reported total sales of 2.20 million units, a growth of 7.6% compared to 2.04 million units sold in the same period last year.
Maruti’s segment-wise sales
Domestic sales (which include passenger vehicles, light commercial vehicles and OEM supplies) rose 3.2% to 1.80 million units, while passenger vehicle sales rose 2.9% to 1.66 million units. In this, the utility vehicle (UV) segment remained the main driver of growth in sales, which increased by 4.6% to 689,631 units.
In contrast, ‘mini segment’ sales declined by 11.9% to 100,550 units, indicating that demand for entry-level cars still remains weak. The compact segment witnessed a growth of 4.6% with sales at 736,313 units, attributed to strong sales of models like WagonR, Swift, Dezire and Baleno. At the same time, a huge decline of 74.4% was recorded in the mid-size sedan segment, which shows the increasing trend of customers towards SUVs.
Maruti continues to maintain its strong hold in the entry and compact segments. Maruti’s range of small cars in the mini segment includes models like Alto K10 and S-Presso, while the compact segment includes models like Celerio, WagonR, Swift, Dezire, Baleno and Ignis. All these are available in petrol and CNG options. There is a lot of long term growth potential for India in the passenger vehicle sector. There are only 30 vehicles per 1,000 people in India, while the figure is around 223 in China and 755 in the US.