Why did hatchback sales in India increase in Q4 2025?

Hatchback sales increased in Q4 2025 due to a GST cut on small cars, making them more affordable and encouraging upgrades from two-wheelers.

What is Maruti Suzuki's observation on hatchback buyers?

Maruti Suzuki noted a 5% rise in first-time buyers choosing hatchbacks after the GST reduction, with strong demand for mini car models.

Will compact SUVs continue to impact hatchback market share?

Buyers are increasingly valuing the comfort and practicality of compact SUVs, which may continue to influence the market share of hatchbacks.

Home / Business and Economy / Hatchbacks Roar Back: India Car Sales See Q4 Revival

Hatchbacks Roar Back: India Car Sales See Q4 Revival

12 Jan

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Summary

Hatchback sales volume increased about 20% in the last quarter of 2025.
GST cut to 18% on small cars from 28% boosted entry-level upgrades.
Maruti Suzuki saw 5% more first-time buyers opting for hatchbacks post-GST.

Hatchbacks Roar Back: India Car Sales See Q4 Revival

The share of hatchbacks in India's car sales has seen a notable increase in the last quarter of 2025, marking a potential turnaround after a period of decline that began during the Covid-19 pandemic. Sales volumes for hatchbacks experienced a sequential rise of about 20% during this period, helping the segment achieve flat volumes for the calendar year 2025 compared to the previous year.

Industry experts attribute this recovery largely to the Goods and Services Tax (GST) reduction implemented on September 22, 2025. The GST on most small cars was slashed to 18% from 28%, leading to price reductions by automakers. This affordability boost has reportedly encouraged many two-wheeler users to upgrade to entry-level cars, arresting the market share slide for hatchbacks.