CARVERSAL

India has emerged as the third-largest car market in the world, leaving most developed countries behind. Even with this huge expansion, the top-selling cars in India have been controlled by only seven models up to now—with hatchbacks leading the pack until 2024. But that was turned upside down when the Tata Punch became the top-selling car, which is a sign of a shift in consumer choice towards SUVs. This shift begs a pertinent question—are Indian manufacturers narrowing down customer options by over-weighting SUVs versus other segments such as hatchbacks and sedans?

Let's get up close and personal with how automobile manufacturers are impacting automobile customers and whether your choice is as varied as it appears.

The SUV Boom in India: How Did It Happen?

A few years back, hatchbacks used to constitute one out of every two cars sold in India. Their low price, mileage, and small size made them perfect for first-time car owners as well as city dwellers. SUVs have now surpassed them, and their market share has increased manifold. But why and how did an SUV revolution occur in India?

1. The SUV Trend Started With Renault Duster

The trend of buying SUVs started in 2012 with the introduction of Renault Duster. The vehicle had a tough road presence, powerful 1.5-liter diesel engine, and economical price tag. The public liked its toughness and functionality, and in a matter of overnight, it became extremely popular.

Watching this, Ford introduced the EcoSport, targeting a lower segment SUV. The others didn't wait long to follow, bringing in compact and midsize SUVs such as the Maruti Brezza, Hyundai Creta, and Kia Seltos. What happened? SUVs turned out to be the favorite of Indian buyers, and OEMs began considering this space more earnestly.

2. More Features, Better Road Presence, and Comfort

SUVs now come with much more features than sedans or hatchbacks. Customers today receive:

• Larger infotainment screens

• Sophisticated safety features such as ADAS, 360-degree cameras, and six airbags

• Increased interior room and improved road presence

• Greater ground clearance, which is handy for Indian bad roads

3. EMI Options Have Made SUVs Affordable

Previously, the cost of a car was the concern for the customers. Easy EMI facility has reduced that cost. Now, individuals can afford SUVs easily. People go for good and large SUVs these days because they are ready to pay EMIs on a monthly basis. Low down payment and long tenors are provided by most banks, and hence the customers do not hesitate in going for loaded SUVs rather than small hatchbacks.

Also Read: How BS7 will kill your diesel cars forever

Are Automakers Neglecting Hatchbacks & Sedans?

The surge in demand for SUVs has led automakers to shift their focus away from fewer hatchbacks and sedans. Indian customers previously had a lot of choices in these segments. But today it's quite different:

1. Fewer Hatchback & Sedan Launches

A glance at the new car introductions lately will reveal that nearly all the major carmakers are concentrating on SUVs. Even though new SUVs are launched or redesigned annually, there has been a lack of attention to hatchbacks and sedans. The ones that are now being redesigned are facelift models and not new models altogether.

In contrast, its hatchbacks—Tiago and Altroz—have seen little change at all. Likewise, Hyundai has fast-tracked the SUV lineup (Creta, Venue, Alcazar) with little emphasis placed on the Grand i10 Nios or Aura sedan.

2. Declining Sedan Sales

India's sedan segment is almost lacking in very few models. Even erstwhile bestsellers like the Honda City and Hyundai Verna are far from SUVs. Car makers now consider sedans unviable, hence models are increasingly fewer in this segment.

All other carmakers like Volkswagen and Skoda are also down-sizing from sedan sales and focusing on new models, particularly Taigun and Kushaq. Maruti Suzuki, which is becoming synonymous with affordable sedans such as Dzire and Ciaz, has shifted focus to SUVs-the likes of Grand Vitara and Fronx.

What Else is Driving SUV Growth?

Besides carmaker strategy and consumer demand, there are also external factors propelling the dominance of SUVs in India.

1. Changing Government Policies

• Stricter safety and emission regulations have made small cars costly to produce. Meeting BS6 norms and crash test requirements have led firms to increase hatchback prices.

• SUVs will prove to be more profitable than hatchbacks, as prices enable the firms to absorb extra cost incurred due to heightened regulation.

2. SUVs Now Offer Competitive Fuel Efficiency

Previously, SUVs used to be said to have bad mileage, but that's no longer the case. Auto manufacturers came up with smaller turbocharged engines, hybrid power, and CNG variants, and now SUVs are as fuel-efficient as hatchbacks.

For instance, Hyundai Venue 1.2-liter petrol now has approximately 18 km/l, and Maruti Brezza CNG has 25 km/kg, and these are good choices for daily small cars.

3. Brand Marketing & Consumer Mindset

SUVs are now seen as aspirational vehicles. Automakers aggressively market them as powerful, stylish, and feature-packed. This has shifted buyer perceptions—many prefer to upgrade to SUVs rather than sticking with traditional small cars.

What Does This Mean for Car Buyers?

If you’re looking to buy a car in 2025 and beyond, you’ll likely notice the following trends:

1. Limited Hatchback and Sedan Choices

• With manufacturers cutting back on hatchback and sedan production, the consumer has fewer choices in these segments.

• If you desire an economy vehicle, such as the Alto K10, S-Presso, and Celerio, these remain on the market but are no longer the priority of makers.

2. More SUV Options at Affordable Prices

• Makers are offering SUVs with low prices of Rs 7-15 lakh, which are looking very appealing to budget-conscious buyers.

• Search for lower and mid-size SUVs with affordable rates and improved fuel efficiency.

3. Expect More Hybrid and CNG SUVs

• Automakers are rolling out hybrid and CNG SUVs to provide improved fuel efficiency.

• The newly launched Maruti Suzuki Fronx CNG, Hyundai Creta Hybrid, and Tata Nexon CNG will be more fuel-efficient at a lesser expense.

Final Verdict: Are Indian Automakers Spoiling Your Choice?

Although car companies are not phased out of hatchbacks and sedans, they like SUVs because there is strong demand and higher profit margins. This limits consumer choice for people who like small, low-cost cars.

But the days of choosing an SUV only for its size are long gone; now, improved features, safety, and fuel economy have made it a much more attractive buy. Therefore, if you are considering a new car, your impulse will be towards an SUV.

In other words, while cars produced in India may not entirely wrest your choice away, they are certainly giving buyers the impression of being nudged in the direction of SUVs; whether it's good or bad depends on what you're after!

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