India's passenger-vehicle market is in the middle of a clear structural shift as buyers are moving away from entry-level hatchbacks and gravitating toward SUVs, according to the SOIC Research report.&nbsp;The study finds that entry-level hatchbacks have lost market share for five consecutive years, while both entry-level and premium SUVs have enjoyed sharp gains. Between fiscal years 2018–19 and 2023–24, the report says, hatchbacks have steadily ceded ground as rising incomes and changing consumer aspirations push buyers toward larger, better-equipped vehicles.&nbsp;A snapshot of the most recent figures is striking: SUV sales rose 23 per cent year-on-year in 2024, while hatchbacks fell 17 per cent, the report's chart shows. SUVs now account for around 52 percent of passenger-vehicle sales, compared with 26 percent for hatchbacks -- a low not seen in two decades.<h2>What Indian experts say about the market</h2>Automakers are responding. Dr. Anish Shah, MD &amp; CEO of Mahindra Group, said, "Mahindra &amp; Mahindra has decided not to make sedans, hatchbacks, and smaller SUVs". He underscored how manufacturers are reshaping product portfolios to match demand. Tata Motors MD Shailesh Chandra echoed the industry view, noting the SUV segment's growth is being driven by both upgraders and first-time buyers.&nbsp;Industry veterans point to two broad forces behind the trend. First, affordability headwinds in the entry-car segment have made the smallest models less attractive economically. Second, a premiumization wave is reshaping buyer priorities -- design, interior comfort, connectivity, and brand perception now play a larger role than compact footprint alone.&nbsp;The ripple effects extend beyond vehicle bodies. The report highlights how premiumisation is filtering through the auto value chain -- from higher-spec interiors to upgraded ancillaries and accessories -- providing new revenue opportunities for suppliers and aftermarket players alike.&nbsp;Still, some analysts caution that small cars are not dead: they may see cyclical revivals when macro conditions change. But R.C. Bhargava, Chairman of Maruti Suzuki, told the report that "India is graduating from small cars to upper-segment cars," and that the long-term trajectory looks firmly weighted toward SUVs.

India's passenger-vehicle market is in the middle of a clear structural shift as buyers are moving away from entry-level hatchbacks and gravitating toward SUVs, according to the SOIC Research report.

India's passenger-vehicle market is in the middle of a clear structural shift as buyers are moving away from entry-level hatchbacks and gravitating toward SUVs, according to the SOIC Research report. The study finds that entry-level hatchbacks have lost market share for five consecutive years, while both entry-level and premium SUVs have enjoyed sharp gains. Between fiscal years 2018–19 and 2023–24, the report says, hatchbacks have steadily ceded ground as rising incomes and changing consumer aspirations push buyers toward larger, better-equipped vehicles. A snapshot of the most recent figures is striking: SUV sales rose 23 per cent year-on-year in 2024, while hatchbacks fell 17 per cent, the report's chart shows. SUVs now account for around 52 percent of passenger-vehicle sales, compared with 26 percent for hatchbacks -- a low not seen in two decades. What Indian experts say about the market Automakers are responding. Dr. Anish Shah, MD & CEO of Mahindra Group, said, "Mahindra & Mahindra has decided not to make sedans, hatchbacks, and smaller SUVs". He underscored how manufacturers are reshaping product portfolios to match demand. Tata Motors MD Shailesh Chandra echoed the industry view, noting the SUV segment's growth is being driven by both upgraders and first-time buyers. Industry veterans point to two broad forces behind the trend. First, affordability headwinds in the entry-car segment have made the smallest models less attractive economically. Second, a premiumization wave is reshaping buyer priorities -- design, interior comfort, connectivity, and brand perception now play a larger role than compact footprint alone. The ripple effects extend beyond vehicle bodies. The report highlights how premiumisation is filtering through the auto value chain -- from higher-spec interiors to upgraded ancillaries and accessories -- providing new revenue opportunities for suppliers and aftermarket players alike. Still, some analysts caution that small cars are not dead: they may see cyclical revivals when macro conditions change. But R.C. Bhargava, Chairman of Maruti Suzuki, told the report that "India is graduating from small cars to upper-segment cars," and that the long-term trajectory looks firmly weighted toward SUVs.

Indian car market: SUV sales rose 23 per cent year-on-year in 2024, while hatchbacks fell 17 per cent. SUVs now account for around 52 percent of passenger-vehicle sales.

SUVs dominate the Indian market, entry-level hatchbacks lose share: Report

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SUVs dominate the Indian market, entry-level hatchbacks lose share: Report