June sees first decline in SUV sales in India in over five years amid economic challenges

Monthly SUV sales in India fell for the first time in more than five years in June, weighed down by IT sector layoffs, geopolitical uncertainties and macro challenges. The sport utility vehicle segment has been the key driver of demand in the passenger vehicle market for nearly a decade now. According to latest industry data for the SUV segment exclusively accessed by ET, sales fell by 2.1% from last year to about 175,000 units in June. Segment-wise passenger vehicle sales data is yet to be compiled for July.

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, are hopeful of a sales revival for the rest of the fiscal, especially the coming festive season, backed by product launches.

The country’s largest carmaker, Maruti Suzuki, is confident of expanding its footprint in the category through two new products this fiscal, including a battery electric vehicle (BEV).

“Our focused product interventions since June 2022 have resulted in a 75% increase in the SUV market share: From around 12% in FY23 to approximately 21% in FY24 and FY25,” said Partho Banerjee, senior executive officer for marketing and sales, Maruti Suzuki.

Mahindra & Mahindra (M&M) too is looking to beat the industry trend and post double-digit growth in SUV sales in FY26. “Mahindra has projected a target growth of mid-to-high teens for its SUV segment in FY26,” said Nalinikanth Gollagunta, chief executive, automotive division, at M&M. The company is slated to introduce multiple models — including mid- and lower-pack BEV SUVs, two all-new BEV SUVs and new variants of select fossil fuelpowered SUVs — to sustain its growth momentum.