In the domestic passenger vehicle industry, if there is one car that has suffered the pangs of the pandemic the most, it is the Maruti Alto. It is ironic because as the most successful car brand in the history of this industry, Alto was one of the cars that should have benefitted the most instead.
In the post pandemic world, the general belief was consumers would opt for personal transportation and shun shared mobility which would work in favour of Alto, one of the most affordable cars around. What happened instead was it suffered an almighty fall. In fiscal 2021, Alto’s unparalleled 16 year reign at the top came to an end as sales declined 17% (see chart). This came on the back of a 26.4% drop in the previous fiscal 2020 (pre pandemic). Last fiscal they fell by another 8.7%, for the third straight year, and from being the best selling car in 2019, Alto has dropped to fourth on the list.
A number of factors have combined together to contribute to this decline. A K-shaped recovery of the Indian economy meant that mini cars have struggled while demand for mid size SUVs that cost three-four times more, are at an all time high. First time buyers that contributed to much of Alto and its predecessor M800’s sales in the past, are down to a trickle.
At the same time, a raft of regulatory changes including the jump from BS IV to VI emission norms and stringent safety regulations such as mandatory dual airbags have made cars in general more expensive. But it has impacted the entry level segment more. At a time when the quintessential Alto buyer that graduates from a two wheeler is already squeezed, the higher cost does no favour.
Further, the entry of S Presso with the 1 litre engine and the discontinuation of Alto’s own K10 variant in December 2020, did not help matters. First introduced in 2010, K10 accounted for a third of Alto’s annual sales and was instrumental in it clocking all time high 3.46 lakh units in fiscal 2011.
“There is no denying that Alto’s numbers have gone down but even now at 1.46 lakh units it outsells any SUV in the country. The numbers are still solid,” said Shashank Srivastava, senior executive officer (marketing and sales) Maruti Suzuki India Ltd. “Of course the growth of SUVs is strong and consumer preference is changing but the attraction of the small car has not diminished. I am certain that with the return of the K10, Alto will be back to number 1 position this year.”
The expectation is built on the share of sales of the 1 litre engine in the past. Maruti expects the K10 to add about 60-70,000 units to Alto’s volumes this year, similar to what its other model S Presso with the same engine managed in fiscal 2022–66,595 units. In the first four months of this fiscal, Alto has slipped further in the pecking order to the number 7 spot and trails market leader Wagon R by 30,000 units.
“With the S Presso we were trying to capture the craze for SUVs by creating a vehicle with a raised position and stance in an affordable package. It has not exactly delivered on that premise so we will work on it to make it better,” Srivastava said. “At the same time there was a void in the market with the exit of K10 and we are plugging that gap now.”
While the SUV segment in India is a highly competitive and cluttered space, there is a dearth of options in the entry level hatchback segment. With Hyundai slated to discontinue the Santro later this year, the only rival to the Alto and S Presso in the market is the Renault Kwid. While that gives it the advantage in a shrinking segment, and the decline maybe arrested this year, it is almost certain that Alto will not be able to regain its lost glory completely.
“This segment is most susceptible to the overall growth of the country’s economy. If that grows consistently and inflation is under check, then this segment will grow as well,” he said. “At the same time, any additional headwind by way of fresh regulatory requirements will add to cost and undermine this segment. Frankly, even if I wish to be optimistic, it is difficult to imagine Alto scaling its peak of 2010-11 in the current scenario.”
One of the longest surviving cars in India, the Alto is the first car to clock cumulative sales of over 4 million units. At least that record is out of reach for most other cars in the country.
