TL;DR
SUVs now hold 52% of the Indian car market, as buyers prioritize premium features and design over affordability, leading to a decline in hatchback sales.
A new report indicates a significant shift in the Indian passenger vehicle market, with SUVs now holding a dominant 52% market share, while hatchbacks have fallen to a 26% share, their lowest in almost two decades. This trend, termed 'Premiumisation,' reflects a fundamental change in buyer preferences, moving beyond mere affordability to seeking enhanced design, technology, and road presence.
In the fiscal year 2024, SUV sales surged by 23% year-on-year, contrasting sharply with a 17% decline in hatchback sales. Automakers are adapting by prioritizing compact SUVs over traditional entry-level hatchbacks in their product pipelines. Features previously exclusive to premium models, such as touchscreens, connected technology, and panoramic sunroofs, are now becoming standard expectations in the ₹8 to ₹12 lakh price bracket, signifying cars as an extension of lifestyle and status.