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India’s entry-level car segment has made a strong comeback

ICICIdirect Research 18 Aug 2026 DISCLAIMER

 News: According to media sources, India’s entry-level car segment has made a strong comeback, with sales more than doubling to 58,109 units during April–July FY27, compared with 28,193 units a year earlier. The growth was driven mainly by Maruti Suzuki’s Alto and S-Presso, which together sold 56,391 units, while Renault Kwid sales rose 7% to 1,718 units. The revival comes after several years of decline, with lower GST rates, improving affordability and renewed interest from first-time buyers supporting demand.

View: The rebound suggests that India’s demand for affordable, small cars remains strong despite the popularity of SUVs. Lower taxation can make a meaningful difference for price-sensitive first-time buyers, potentially bringing more families into car ownership. If demand continues, the small-car segment could regain an important role in expanding India’s passenger-vehicle market. This trend is positive for Maruti Suzuki as sales for its compact car segment is already up by ~38% on a YTD basis.

Impact: Positive

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