Maruti Suzuki India's Chairman R C Bhargava stated that two-wheelers pose the highest risk in terms of safety, and there is a necessity for the country to explore the introduction of cars, especially smaller models, to offer an alternative for two-wheeler users.

Official data indicates that India ranks as one of the top two two-wheeler manufacturers in the world based on volume. In FY25, the overall production of two-wheelers in the country rose by 11.3 percent year-on-year, reaching 2,38,83,857 units, while domestic sales increased by 9.1 percent year-on-year to 1,96,07,332 units, and exports saw a growth of 21.4 percent year-on-year at 41,98,403 units.

At Maruti's 44th Annual General Meeting (AGM), Bhargava remarked, "Given that a significant portion of the population relies on two-wheelers for personal transport, the inherent risks and discomfort linked to these vehicles indicate a need to explore the introduction of cars that could serve as an alternative for two-wheeler users."

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He referenced Japan's rollout of K-cars (or Kei cars) during the 1950s, suggesting, "India should contemplate a similar approach."

K-cars are relatively compact, with maximum dimensions of 3.4 metres in length and 1.48 metres in width, and feature an engine size capped at 660cc.

 

They are also subject to lower safety requirements and lighter taxation than larger vehicles.

Bhargava noted that despite facing a challenging policy environment, Maruti has achieved significant growth. He attributed the introduction of European safety and emissions standards in India as one of the factors contributing to the challenges within the car market.

Regarding the government's recent proposal for Goods and Services Tax (GST) rationalization, Bhargava commented that the restructuring, which will result in only two tax slabs, represents a significant reform that will accelerate economic growth and boost employment.

While the Group of Ministers (GoM) has endorsed the GST rationalization proposal, the specifics of the new GST framework are expected to be revealed after the GST Council meeting on September 3 and 4.

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Currently, the GST framework comprises four slabs: five percent, 12 percent, 18 percent, and 28 percent. With the proposed rationalization, the 12 percent and 28 percent slabs will be eliminated, maintaining the five percent and 18 percent slabs, alongside the introduction of a new 40 percent slab for luxury and sin items.

All cars, regardless of their classification, are subject to a GST rate of 28 percent. Depending on factors such as body style, length, engine type, and capacity, a compensation cess ranging from nil to 22 percent is also applied. Consequently, the total tax can be as low as 29 percent or as high as 50 percent. All electric vehicles (EVs) fall under the five percent GST rate, with no compensation cess applicable.