In every 3 cars sold in India, 2 are SUVs

Gone are the days when small hatchbacks, focusing on daily commuting and offering higher fuel economy, were the driving force of the Indian passenger vehicle market. Over the last few years, the rapid evolution in consumer preference, keeping pace with the global trend, has brought forward the utility vehicles, including SUVs, crossovers, and MPVs, to the driving seat of the market. In FY26, SUVs' share in the total passenger vehicle sales surged to 65%. This means SUVs now account for two in every three passenger vehicles sold in India.

Rubix Data Sciences' latest industry insights report has revealed that passenger vehicle sales in India grew around 8% year-on-year (Yoy), while SUVs now account for 65% of total PV sales. This reflects a structural shift in consumer demand. The Indian auto industry not only clocked significant growth in the domestic market, but registered a record high export number as well, with South Africa, Saudi Arabia, Mexico, Japan, and the UAE emerging as key export markets. The report also stated that policy push, strategic investments, rising financing, electric vehicle adoption and replacement demand are expected to drive the next phase of growth in the segment.

India currently holds a strong position globally in terms of production and sales of passenger vehicles. The country ranks third in production of passenger vehicles, as well as third in sales of passenger vehicles.

According to the report, passenger vehicle production rose from 3.06 million units in FY21 to 5.54 million units in FY26, at a 13% CAGR, while domestic PV sales grew from 2.71 million to 4.64 million units at an 11% CAGR. After the segment witnessed sales moderate in FY25, momentum returned sharply in FY26, with PV sales growing by around 8% YoY. The recovery is attributed to the GST rate cut, which lowered the tax burden on vehicles, and easing RBI repo rates, which reduced financing costs.

The report also flagged a structural shift towards utility vehicles, whose share of PV sales climbed sharply from 39% in FY21 to 65% in FY25, as consumers increasingly gravitated toward SUVs and crossovers. In the export front, PVs clocked a 17% CAGR to reach a record 0.77 million units in FY25, led by compact cars and UVs from OEMs such as Maruti Suzuki, Hyundai and Volkswagen; Maruti Suzuki alone posted a 34% surge in exports to an all-time high of 4.47 lakh units in FY26.

The report stated that technology and regulation are also reshaping the industry. ADAS penetration in PVs rose from 6.2% in H1 2024 to 8.3% in H1 2025, and the upcoming Euro 7-aligned BS-VII emission norms, expected to be notified in FY27, are set to drive a fresh wave of vehicle and component upgrades. Electrification continues to gather pace, with EV penetration in PV registrations rising from 1% in 2022 to 4% in 2025, and overall four-wheeler EV penetration reaching 5.35% in 2026, supported by expanding electric and hybrid launches.

Check out Upcoming Cars in India 2026, Best SUVs in India.