Share of SUVs scales 50% of sales in FY24

New Delhi: What was once the share of small cars in India, has now been taken over by SUVs. The share of all-terrain vehicles (SUVs), priced between less than Rs 10 lakh and more than Rs 1 lakh crore, in India's car sales crossed 50% for the first time in a full year in 2023-24, almost doubling to what they accounted for four years back.

The share of hatchbacks (minis), which were once the staple of Indian car buyers and accounted for one in every two cars sold in the country, has fallen to about 28%, hurt by the growing popularity of SUVs. With hatchback prices rising by up to 65% in recent years and buyers' incomes rising much more slowly, modest small cars have failed to keep up.

This trend will increase, as it has in recent years. “We see the share of SUVs rising to around 55% from here, while hatchbacks may stabilize at around 25%,” says Shashank Srivastava, Executive Committee Member, Maruti Suzuki.

The change has been so dramatic that Maruti Suzuki, which was once the home for most affordable mini cars, now gets almost 22% of its sales from SUVs (this was 11% at the close of FY23). Perhaps with the wider range of small cars, the company's share of hatchbacks has declined over the years.

As hatchbacks fight a battle for survival, the story has been even more challenging for sedans. Sedans' share of auto sales fell to single digits in fiscal 2024. They closed the year at 9% compared to 14.3% at close of FY20.

Companies are cashing in on the trend. Mahindra & Mahindra, Hyundai, Tata Motors and even luxury companies like Audi and Mercedes-Benz have launched new SUVs and also earmarked them for the push towards electrics.

For example, M&M has an exclusive range of off-road vehicles in its portfolio and has imposed the SUV body style on its soon-to-be-launched new electric vehicles. Hyundai has also maintained its new launches and marketing spend focused on SUVs, evident in its broad portfolio that includes the Exter at the entry and gradually progresses through the Venue, Creta, Alcazar and Tucson, with the Ioniq5 EV at the top. “We continue to see strong demand for our SUVs, and their share in our total sales now stands at 65%,” says Tarun Garg, Chief Operating Officer, Hyundai India.

Mercedes has 12 SUVs in its portfolio.

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