Maruti Suzuki doubles down on SUVs as small cars sale slides

Maruti Suzuki India Ltd. is set to expand its SUV portfolio with a second mid-sized model, people familiar with the plan said, as the nation’s top carmaker scrambles to counter slowing demand for its bread-and-butter small cars.

The Indian unit of Japan’s Suzuki Motor Corp. plans to launch the vehicle on September 3 and hopes it will double its sales in the segment, the people said, asking not to be identified discussing business plans. It will be the first new model to roll out of the company’s plant in Kharkhoda in the northern state of Haryana, from where it targets around 10,000 units a month when scaled fully, they said.

The launch comes at a critical juncture. Although still the nation’s largest carmaker by sales, the Suzuki unit’s hatchback-heavy lineup has helped give rivals — Mahindra & Mahindra Ltd., Hyundai Motor India Ltd. and Tata Motors Ltd. — a headstart as consumer preference shifted toward SUVs. That, together with shrinking small-car sales, has put Maruti’s goal of grabbing 50% of the domestic market, up from around 40% now, in doubt.

While the Grand Vitara has seen volumes plateau in recent months, the new SUV is positioned as a more mass-market version, the people said.