“Widespread Real Income Stagnation”: Congress’ Jairam Ramesh On Car Sales Remarks By Maruti Chief
In a revealing assessment of India’s automotive market, R C Bhargava, Chairman of Maruti Suzuki India Limited (MSIL), has stated that car purchases remain largely confined to the wealthiest 12 per cent of Indian households—those with an annual income exceeding Rs 12 lakh. His comments, made during a post-results press conference on Friday, have sparked political attention, with Congress leader Jairam Ramesh citing them as evidence of “widespread real income stagnation” across the country.
Bhargava pointed out that for the vast majority—88 per cent of Indian households—even small cars have now become unaffordable. “How can you get high car sales growth if 88 per cent of the country are below the levels of income where they cannot afford these cars costing Rs 10 lakh and above?” he asked. “The smaller cars, the cheaper cars have become unaffordable to these people, as I’ve said in the past, because of the high cost of implementing regulatory measures.”
The remarks came as MSIL reported a 4.3 per cent year-on-year decline in consolidated net profit for the fourth quarter of 2024-25, with earnings falling to Rs 3,711 crore. The company attributed this to a continued slump in small car sales and weakening demand in urban markets. Industry-wide figures paint a similar picture: overall passenger vehicle sales growth for 2024-25 stood at 4.3 million units, just 2 per cent higher than the previous year, according to the Society of Indian Automobile Manufacturers (SIAM).
Bhargava further highlighted a worrying statistic—India’s car penetration rate is only 34 per 1,000 people, “probably the lowest among any country around this area of the world,” he said. He noted that sales of small sedans and hatchbacks declined by about 9 per cent during the year. “If there is a 9 per cent decline in the car segment that is bought by 88 per cent of the people in this country, from where will you get the growth?” he asked.
Reacting to the Business Standard report on Bhargava’s comments, Congress general secretary Jairam Ramesh said the chairman’s observations “have a great bearing on the economy”. He reiterated the key points raised by Bhargava: the restriction of car purchases to the top 12 per cent of households, the steep decline in small car sales, and the meagre 2 per cent growth in overall passenger vehicle sales between 2023-24 and 2024-25.
Ramesh linked these trends to broader economic concerns, stating: “The root cause of this slowdown is the widespread real income stagnation for the majority of India.” His remarks come at a time when the nation is already reeling from the emotional impact of the recent terror attack in Pahalgam, which he described as casting “a long shadow on our lives”.
