Mid-size SUVs now more popular than compact counterparts in India
What's the story
The Indian automotive market is witnessing a major shift in consumer preferences, with mid-size SUVs gaining more traction than their compact counterparts. According to estimates by Kotak Institutional Equities, mid-size SUVs and crossovers measuring over four meters accounted for 18.2% of domestic passenger vehicle sales in Q1 FY27. This is a significant jump from the 12.4% share they held two years ago and the 15% share they commanded a year ago.
Market shift
Compact SUVs see decline in market share
In contrast to the rising popularity of mid-size SUVs, compact SUVs (those under four meters long) have seen a decline in their market share.
Their contribution fell to 14.6% in Q1 FY27 from 16.2% a year ago and 15.3% in Q1 FY25.
This change indicates that buyers are now prioritizing space, comfort, and features over smaller models like hatchbacks and sedans.
Consumer preferences
Shift in consumer priorities
The shift toward mid-size SUVs indicates a change in consumer priorities, with more emphasis on space, comfort, and features.
For example, Hyundai's sunroof-equipped variants have made up a significant share of its SUV volumes.
"This indicates a continuing premiumisation trend in the PV market, with consumers increasingly opting for higher-value vehicles that offer greater versatility and comfort," said Poonam Upadhyay, Director at Crisil Ratings.
Market response
Automakers respond to changing market dynamics
The growing popularity of mid-size SUVs has prompted automakers to respond with a steady stream of new models and facelifts.
Hyundai Motor India, for instance, is planning to launch a new mid-size internal combustion engine SUV during the festive season.
The move shows manufacturers' confidence in the medium-term growth prospects of this segment, and their strategy to strengthen their positions in one of India's fastest-growing categories within passenger vehicles (PVs).