India’s compact car segment is losing steam, with hatchbacks registering their sharpest sales drop in recent years. In FY25, sales of small cars fell by 13% year-on-year, totaling around one million units — a stark contrast to the booming SUV market, which clocked 2.35 million units, more than double that of hatchbacks.
SUVs continued their strong upward trajectory, posting a 10.2% annual growth, highlighting the widening gap between budget-conscious buyers and those opting for premium, feature-packed vehicles. The shift underscores a broader trend in consumer preferences, increasingly tilted toward larger, more aspirational rides.
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