Compact SUVs now sell more than hatchbacks in India: Here’s why

All the automotive markets in the world are shifting towards buying new-generation compact SUVs, with India being one of them. In the current fiscal year, the sales of entry-level compact SUVs measuring under the four-meter mark have surpassed the sales of premium hatchbacks. Such has become the demand for compact SUVs that every one of the two passenger vehicles sold in India is now a compact SUV.

Compact SUVs now sell more than hatchbacks in India: Here’s why

The chief reasons behind the growing popularity of compact SUVs in India are the launch of newer and fresher models in this segment, aspiration of owning a bigger vehicle in the same price range and upright driving stance and higher ground clearance to take on the bad roads easier. In addition to these reasons, easier availability of finance options and disruptions in the supply chain have impacted the production of hatchbacks.

There are solid facts backing this rising popularity of compact SUVs in India. In the 11 months of the current fiscal year, around 5,94,825 units of compact SUVs sold against 5,45,267 units of premium hatchbacks. With these figures, the compact SUVs now account for 22 per cent of the market share, compared to 19 per cent of the market share of premium hatchbacks.

Compact SUVs contributes 60% of sales of total SUVs

Compact SUVs now sell more than hatchbacks in India: Here’s why

The Indian car market got its first-ever compact SUV in the face of Ford Ecosport in 2013, which gained instant popularity for being a one-of-a-kind vehicle. This segment became further interesting to look upon with the launch of Maruti Suzuki Vitara Brezza in 2016 and Tata Nexon in 2017. In the last two three years, several other players like Mahindra XUV300, Hyundai Venue, Kia Sonet, Toyota Urban Cruiser, Nissan Magnite and Renault Kiger entered this segment and made this segment the top-favourite and most competitive passenger vehicle segment in India.

Currently, these compact SUVs account for 60 per cent of the total sales of SUVs in India. Ironically, the car which started it all, Ford Ecosport, is no longer on sale during the prime existence of this segment, as Ford decided to quit the Indian car market in 2021.

The sales of compact SUVs have also eaten up the popularity of similarly priced premium sedans like Maruti Suzuki Ciaz, Honda City and Hyundai Verna, the sales of which have dropped in a similar timeframe. Many carmakers have started focusing entirely on SUVs. While Mahindra has declared itself as a UV-only manufacturer, other newer brands like Jeep, MG and Kia have announced that they will be focusing primarily on SUVs.