Shrinking Hatchback Market: Sales Dip as SUV Craze Soars in India


Shrinking Hatchback Market: Sales Dip as SUV Craze Soars in India

Shrinking Hatchback Market: Sales Dip as SUV Craze Soars in India

There was a time when hatchbacks and sedans dominated the Indian market. However, over the past few years, their demand has been consistently declining. Small cars from major companies like Maruti, Hyundai, and Tata are witnessing a drop in sales. As a result, no auto company has launched a new hatchback model in recent years.

If we look at the market trends, there are several reasons behind this decline in small car sales, the most prominent being the rising prices and the growing popularity of SUVs. Let’s try to understand the reasons behind the decreasing demand for small cars in this article.

Reasons for the decline in small car sales

1. Continuous price hikes

According to reports, due to stringent safety and emission norms, the prices of small cars have increased by 30 to 40 percent in the last 5–6 years. On the other hand, the SUV market has expanded so much that there are now many affordable options available in this segment. This is why middle-class buyers are turning away from hatchbacks. For example, the starting price of the Maruti Suzuki Wagon R is ₹5.79 lakh (ex-showroom). Meanwhile, entry-level SUVs like the Tata Punch and Hyundai Exter start at around ₹6 lakh (ex-showroom, Delhi).

2. Growing Craze for SUVs

Indian customers are increasingly preferring SUVs. Not just in cities, but even in rural areas, people are buying SUVs as a status symbol. Compared to hatchbacks, SUVs are considered more spacious, taller, and safer, making them a better choice for daily commuting as well as family travel.

3. Rising Prices of Premium Hatchbacks

Even in the premium hatchback segment, prices have gone up significantly. As a result, these cars are now only about 10–20% cheaper than sub-4-meter SUVs. In such a scenario, customers prefer to spend a little extra and opt for an SUV instead.

4. Growing Market for Used Cars

The used car market in India is expanding rapidly. Now, even in remote villages, buying a second-hand car has become easier. As a result, many people prefer to buy a used SUV at the price of a new hatchback.

Market Share of SUVs vs Hatchbacks

According to media reports, SUVs accounted for around 65% of the total car sales in India during FY 2024–25, compared to approximately 60% in FY 2023–24. Even in the first five months of the calendar year 2025, SUVs have consistently remained the top choice among buyers. On the other hand, the market share of the hatchback segment has been steadily declining. In FY 2024, its share fell to 27.8%, whereas it was 35% in 2022. The hatchback sales have also decreased in the first five months of 2025.

Let’s try to understand this trend better with the help of sales reports for some small cars:

Maruti Suzuki Alto K10 and Celerio

Sales change (Year-on-Year) for these two entry-level Maruti Suzuki cars in the past five months:

Maruti Suzuki Alto K10 Sales Report (January-May 2025)

Month

Sales in 2024 (Units)

Sales in 2025 (Units)

Growth/Decline (%)

January

12,395

11,352

-8.41% (Decline)

February

11,723

8,541

-27.14% (Decline)

March

9,332

9,867

+5.73% (Growth)

April

9,043

5,606

-37.99% (Decline)

May

7,675

4,970

-35.24% (Decline)

Maruti Suzuki Celerio Sales Report (January-May 2025)

Month

Sales in 2024 (Units)

Sales in 2025 (Units)

Growth/Decline (%)

January

4,406

1,954

-55.65% (Decline)

February

3,586

4,226

+17.84% (Growth)

March

3,478

2,268

-34.78% (Decline)

April

3,220

1,474

-54.22% (Decline)

May

3,314

1,861

-43.84% (Decline)

 

Renault Kwid

The Renault Kwid is one of the most affordable cars in the Indian market, competing directly with the Maruti Suzuki Alto K10. Its sales have also been steadily declining.

Renault Kwid Sales Report (January-May 2025)

Month

Sales in 2024 (Units)

Sales in 2025 (Units)

Growth/Decline (%)

January

856

569

-33.53% (Decline)

February

828

698

-15.70% (Decline)

March

928

532

-42.67% (Decline)

April

977

595

-39.00% (Decline)

May

743

540

-27.00% (Decline)

 

Tata Altroz

This is Tata Motorspremium hatchback, recently updated. It’s the only car in its segment available with petrol, diesel, and CNG powertrains. Its sales figures for January to May 2025 are as follows:

Tata Altroz Sales Report (January-May 2025)

Month

Sales in 2024 (Units)

Sales in 2025 (Units)

Growth/Decline (%)

January

4,935

2,033

-58.80% (Decline)

February

4,568

1,604

-64.89% (Decline)

March

5,985

1,658

-72.30% (Decline)

April

5,148

2,172

-58.00% (Decline)

May

4,983

2,779

-44.00% (Decline)

 

Hyundai Grand i10 Nios

This is Hyundai's entry-level hatchback, well-known for its features. However, its sales have also shown a year-on-year decline.

Hyundai Grand i10 Nios Sales Report (January-May 2025)

Month

Sales in 2024 (Units)

Sales in 2025 (Units)

Growth/Decline (Units)

Growth/Decline (%)

January

6,865

5,311

-1,554

-22.64% (Decline)

February

4,947

4,940

-7

-0.14% (Decline)

March

5,034

4,990

-44

-0.87% (Decline)

April

5,117

4,137

-980

-19.15% (Decline)

May

5,328

4,344

-984

-18.47% (Decline)

 

CarVaidya’s Take

Looking at the sales reports of these four major brands’ hatchbacks, it is clear that there has been a significant year-on-year decline. This indicates that customers are steadily moving away from hatchbacks.

Source: https://hindi.drivespark.com/four-wheelers/2025/why-hatchback-sales-declining-india-suv-boom-check-reason-sales-report-auto-news-in-hindi-035059.html

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