Maruti Suzuki plans new micro-SUV to challenge Tata Punch, Hyundai Exter as Ignis exit looms

Maruti Suzuki is drawing up a blueprint to launch a new entry-level Sport Utility Vehicle (SUV) aimed at taking on models such as Tata Punch and Hyundai Exter, according to people familiar with the development.

The move signals the country’s largest carmaker’s most direct push yet into the fast-growing micro-SUV space, where consumer preference has steadily shifted away from hatchbacks toward SUV-styled vehicles in the sub-₹10 lakh category.

According to multiple sources privy to the development, the upcoming product is expected to be positioned squarely in the high-volume micro-SUV segment, one of the most competitive and fastest-growing pockets of India’s passenger vehicle market, driven largely by first-time buyers and urban consumers upgrading from entry-level cars.

People aware of the development said the model is likely to be introduced with a petrol-only powertrain initially, followed by a factory-fitted CNG variant at a later stage. The platform as well as the powertrains will be shared with existing platforms, which will lead to better synergies.

The model is likely to use Maruti Suzuki’s 1.2-litre petrol engine, which currently powers models such as the Wagon R and Brezza, along with a CNG option based on the same engine architecture.

People in the know also indicated that the new vehicle could be retailed through Maruti Suzuki’s Arena dealership network instead of Nexa, depending on its final pricing and positioning. “A final decision on channel strategy is still under internal discussion,” a person cited above said.

Another person familiar with the matter said several design elements will be derived from the Brezza subcompact SUV. “The company is targeting first-time buyers who aspire for an SUV but have the budget of a hatchback. The upcoming model will address that white space,” the person added, requesting anonymity.

The model is likely to be priced in the ₹6 lakh to ₹10 lakh (ex-showroom) range, placing it in direct contention with the Tata Punch and Hyundai Exter.

An emailed questionnaire sent to Maruti Suzuki’s spokesperson seeking confirmation on the development and product strategy remained unanswered till the time of publication.

Segment dynamics: Punch, Exter drive shift

The development comes as the micro-SUV segment continues to expand rapidly, led by strong demand for models such as the Tata Punch and Hyundai Exter.

The Tata Punch, priced at roughly ₹6.13 lakh to ₹10.20 lakh (ex-showroom), has emerged as one of the country’s best-selling passenger vehicles, with monthly volumes often hovering around 15,000–20,000 units. The Hyundai Exter, priced between ₹6 lakh and ₹10.51 lakh (ex-showroom), has also carved out a steady presence, contributing 4,000–10,000 units per month depending on market cycles.

Industry estimates suggest that the micro-SUV segment has crossed over 2 lakh units annually for leading models alone, underscoring the structural shift in buyer preference toward SUV-inspired body styles even at entry price points. In contrast, the share of entry-level hatchbacks in India’s passenger vehicle market has declined from around 45% a few years ago to nearly 30% currently, reflecting a clear migration of buyers toward SUV-led formats.

Ignis likely on its way out

The new product push comes amid indications that Maruti Suzuki is gradually winding down the Ignis hatchback. Dealer-level feedback suggests limited availability of the model, with fresh dispatches slowing across several markets.

However, the company has not made any official announcement regarding the phase-out of the Ignis.

The Ignis, currently priced between ₹5.35 lakh and ₹7.55 lakh (ex-showroom), has struggled to keep pace with changing consumer preferences. While it peaked at 51,176 units in 2022, average annual sales over its lifecycle have remained in the range of 35,000–40,000 units, translating to roughly 3,000 units per month during its stronger years. Recent monthly volumes have dipped below the 2,000-unit mark, reflecting waning demand.

“Maruti Suzuki is unlikely to retain the Ignis name and is currently mulling whether to revive an iconic name or opt for a new one,” one of the persons cited above said.

Launched in 2017 under Maruti Suzuki’s Nexa channel, the Ignis was positioned as an urban hatchback with crossover styling, but received only one major facelift in 2020 and limited feature upgrades thereafter.

Analyst view: strategic reset needed

Industry analysts say Maruti Suzuki’s next move in this segment will be critical to defending its leadership in the entry-level market.

Puneet Gupta, Director, S&P Global Mobility, said, “The next-generation micro-SUV rollout by Maruti Suzuki is an important launch, particularly as Indian consumers are steadily moving away from traditional hatchbacks toward compact SUV-inspired offerings. Products like the Exter or Punch sit at the intersection of affordability, practicality, and evolving consumer aspiration. With India’s car penetration still at a modest ~36 vehicles per 1,000 people and nearly half of buyers being first-time buyers, the opportunity remains substantial.”

According to him, the Maruti Suzuki Ignis has been in the market for an extended period and now requires a comprehensive overhaul. “Contemporary design, advanced connectivity, and enhanced safety technologies will be critical in helping the company defend its market share while simultaneously appealing to a new generation of first-time buyers.”