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As per the report, while SUVs are given the highest preference by the buyers in the last five years, hatchbacks continue to lose shine among the customers
The Indian auto industry has witnessed a shift in paradigm in the last five years as SUVs have become the top choice for buyers while the entry-level hatchback models continue to slide downwards, reveals an ET Auto report. Hence, the automakers are coming with more and more SUV models packed with latest features in order to woo the customers. This major transformation in the passenger vehicle market indicates that people in India are gradually drifting towards premium cars which are loaded with a plethora of comfort creatures.
A recent report by SOIC Research, titled as Premiumisation: India’s Next Consumption Wave, claims that hatchbacks have been losing ground in the domestic market for the last five years on the trot while SUVs have emerged as the most favourable choice for the buyers. The report further states that SUVs now account for almost half of all the PVs sold in the country.
The data collected between FY2018-19 and FY2023-24 reveals that dipping hatchback sales are equally matched by the sharp rise in entry-level and premium SUV retail, clearly suggesting that the Indian auto industry is fastly moving towards premiumisation. “Mahindra & Mahindra has decided not to make sedans, hatchbacks and smaller SUVs,” said Dr. Anish Shah, MD & CEO, Mahindra Group.
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Echoing the same trend, Tata Motors MD Shailesh Chandra, said, “Especially in the SUV segment, we are seeing growth significantly higher than the industry average… driven by both upgraders and first-time buyers.” Hence, this is the foremost reason that most brands are introducing multiple SUV models with advanced and upmarket features.
As per the data, SUVs witnessed a YoY growth of 23 percent in 2024 while the hatchback models registered a YoY de-growth of 17 percent. The SUVs now own 52 percent market share in the passenger vehicles sales in the Indian market while the hatchbacks stand at merely 26 percent, which happens to be its weakest performance in nearly two decades.
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“India is graduating from small cars to upper-segment cars,” said R.C. Bhargava, Chairman, Maruti Suzuki. The Maruti veteran opined that the long-term trend is clearly in the favour of the SUVs while hatchbacks might get occasional cyclical revivals. In fact, in the coming years, SUV sales are likely to surge further with strong momentum.
In all, we can see a clear shift in customer preferences as they now tend to seek comfort, luxury and space over compact size. It is evident across multiple factors in the auto ecosystem – be it design, be it features or be it the aftermarket accessories. The entry-level hatchback segment is believed to be suffering due to affordability pressures.
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