Passenger vehicle sales grew to around 45.8 lakh units in 2025, up about 6 percent year on year (YoY). SUVs continued to expand their lead, crossing 55 percent market share, but sedans showed a small rise in market share despite fewer new launches and sustained pressure from the SUV segment.
Of the 27 launches in 2025, only one was a sedan, while SUVs comprised more than half of those. EVs accounted for over 40 percent of all new models.
Sedans hold steady despite limited new launches
Compact and midsize models anchor demand; Dzire becomes bestselling car in 2025
Sedans’ share increased from 8 percent to 8.6 percent in 2025, supported by steady demand across compact and midsize cars, including the Maruti Dzire, Hyundai Aura, Tata Tigor, Honda Amaze, Hyundai Verna, Volkswagen Virtus, Skoda Slavia and Honda City.
These models continue to attract buyers who prioritise comfort, space and a traditional three-box layout over ground clearance and stance. Turbo-petrol versions of the Verna and Slavia/Virtus also cater to buyers seeking stronger performance.
The Dzire stood out as India’s bestselling car in 2025, becoming the only sedan since 2020 to top the annual sales charts, highlighting its continued relevance despite the wider shift towards SUVs.
With only one new sedan launching in 2025 – the Skoda Octavia RS in limited numbers – existing models were enough to hold the segment’s share even as SUVs dominated new launches.
SUV growth slows
Smaller year-on-year increase helps other segments hold their ground
The share of SUVs inched up from 54 percent to 55.4 percent, showing that the pace of growth was slower than in recent years. This suggests that the demand for SUVs, while dominant, may be approaching a plateau, allowing other body styles to maintain share rather than lose ground every year.
Nevertheless, SUVs continued to dominate new product activity, with 15 out of 27 new launches last year coming from this segment.
Hatchback sales continue to drop
Compact and sub-compact SUVs leave hatchbacks with limited appeal
Hatchbacks’ share fell from 25 percent to 22.8 percent, extending a multi-year slide as buyers move towards compact SUVs. The segment saw little fresh product activity, with most models carrying over without major updates, barring the Tata Altroz facelift.
Despite the GST cut, entry-level hatchbacks such as the Alto and S-Presso remain price-sensitive, which has limited growth in the segment even as the overall market expanded.
Uday Singh
Suraj Viswanathan
Dipan Sur
Lenny D'sa
Viraaj Bhatnagar
Ameya Dandekar
