Indians are abandoning hatchbacks and switching to SUVs; Market share doubled in 4 years

Indians are shifting away from hatchbacks and embracing SUVs, with the SUV market share doubling in the past four years.

SUV Market Share in India: Once dominated by small cars, the Indian automotive landscape is now overwhelmingly influenced by SUVs. The market share of SUVs has nearly doubled over the last four years, surpassing 50% of the Indian car market during FY2023-24. This marks the first time that SUVs have held a majority share throughout the year.

Conversely, hatchback cars, which were once the preferred choice for Indian car buyers—making up nearly half of all car sales—have seen their market share decline to around 28%. The rising popularity of SUVs is a key factor driving this trend. In recent years, hatchback prices have surged by 65%, potentially contributing to their dwindling sales.

Shashank Srivastava, executive committee member at Maruti Suzuki, commented, “We anticipate SUVs to continue increasing their share to around 55%, while hatchbacks may stabilize at around 25%.” This shift has occurred rapidly, with Maruti Suzuki—known for its affordable small cars—now deriving approximately 22% of its total sales from SUVs.

In contrast, at the end of the financial year 2023, SUVs accounted for only 11% of Maruti Suzuki’s total sales. Sales of hatchback cars have declined, and the situation for sedan cars is even bleaker, with their sales plummeting to a mere 9% in FY24, down from 14.3% at the end of FY20. Thus, sedan car sales have more than halved in just four years.

It is noteworthy that in response to the surging demand for SUVs, companies such as Mahindra & Mahindra, Hyundai, and Tata Motors are increasingly focusing on SUVs. Moreover, luxury car manufacturers like Audi and Mercedes-Benz are also prioritizing the launch of new SUV models.