In my current project we have to implement navigation till third level so I thought of utilizing subsites. They don't want to have subsites instead they want on page Library and create a navigation. I dont see any cons of creating subsite is there is any disadvantges of Sharepoint subsites?
No, I would even advise to work with subsites to create your navigation structure. Using subsites, it's very easy to group information that belongs in one place, and provides even easier use to display context-sensitive content in a content by query webpart.
It's also interesting to use for seo-purposes, because you can make site names descriptive for the content that resides in those sites.