This is the first instance of a monthly decline in SUV sales after years of sustained growth, said industry experts. Slowing SUV sales, in addition to already sluggish overall demand for cars, underscores some buyer fatigue in the category, they noted.
SUVs have steadily bolstered their position in the domestic market, currently accounting for about 55% of all passenger vehicles sold. The segment spans micro-SUV models, compact SUVs, mid-sized as well as large SUVs, catering to a wide array of buyers. “SUV sales dropped for the first time since the pandemic this June. In fact, for the first time in many years, SUV sales grew in modest single digits in the first quarter of FY26,” said a senior industry executive, requesting anonymity.
SUV sales grew in the strong double digits between FY20 and FY25.
However, in the first quarter of this fiscal year, SUV sales slowed to a 5.6% increase at 572,000 units, from a 11.3% rise in FY25. Sales had grown by 42% in FY22, 36% in FY23 and 27% in FY24. SUVs have been significantly outpacing overall passenger vehicle sales, with their share rising to 55% as of March-end, from 14.3% in FY15. “Even when PV sales had dropped by around 18% in FY20 on the back of a broader slowdown in the local market, SUV sales had declined at a much lower rate, about 7%, increasing their share in the total tally. Now even this differential — PV sales fell by 7% and SUVs by 2% in June — has started coming down, hinting that the segment may be plateauing,” said the executive. “We have to watch over the next few quarters if the share of SUVs in PV sales grows further or has bottomed out.” Ravi Bhatia, president at automotive consultancy firm Jato Dynamics confirmed the trend reversal. “Monthly sales data for 2025 reveals a marked and consistent decline in SUV sales between January and June. This appears to be the first prolonged downturn in SUV demand since the pandemic, possibly driven by economic uncertainty, rising fuel costs and changing buyer sentiment,” he said.
Data from Jato showed sales of SUVs, excluding luxury models, fell to 171,341 units in June from 211,946 in January. Luxury SUV sales during the month totalled about 3,660 units.
about 3,660 units. SUVs typically account for about 60% of all new vehicle sales in developed markets.
“In India, while the growth rate in the SUV segment has started moderating, demand for MPVs is picking up,” another executive said.
“The debate now is around what point the SUV segment will plateau at.” Carmakers, though,…
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