SUVs are likely to see a drop in their market share in two years.

The SUV — the largest selling body style in the passenger vehicle segment — contributed 48.7 per cent to the total sales in 2023. This is predicted to peak 54-55 per cent by 2025 after which it will taper down, said an industry expert.

Hatches have maintained a downward trail with its contribution touching the 30 per cent mark from 34.8 per cent.

But the demand for premium hatches such as the Hyundai i20 is on a revival path with a growth of 2 per cent in 2023.

In 2022, 419,000 units of premium hatches were sold, which rose to 436,000 in 2023.

Sales in 2024 will be muted, according to analysts.

"The volume should be large because we have crossed the 4 million plus mark," said Shashank Srivastava, senior executive officer, Maruti Suzuki India Ltd (MSIL).

"But the growth will be muted on this high base," he added.

"This is because, at the beginning of 2023, we saw many pending bookings which have reduced. So the pent-up demand has been fulfilled. In 2024, that kind of demand will not be there. The waiting periods have disappeared for most models.

"Second, there was scope to fill up the sales channels in 2023. There were supply constraints and so stock levels were down. With production at its highest, there is no scope to fill gaps in the channels. So now we have optimal stock.

"The third reason for muted growth is that interest rates have gone up by 50 basis points. The auto retail loan rates, which see a lag in terms of the effects of the repo rate revision, have already witnessed an increase of 130 basis points. We are expecting another increase of 120 basis points," he said.