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There was a 92 percent jump in sales of small cars of companies like Maruti Suzuki in 2026, the trend of middle class has increased again due to GST 2.0 cut and affordable prices. In the last few years, the trend of SUV vehicles is gaining momentum in the Indian automobile market. Amidst all this, once again people are showing their interest in budget cars and turning to showrooms.
The year 2026 has started with a big good news for the automobile sector in India. While for the last few years, customers were inclined towards SUVs, now once again the popularity of small cars, the favorite of the 'middle class', has returned.
Once again the noise of small and economical cars is being heard on Indian roads. According to the latest data, a huge jump of 92 percent has been seen in the sales of cars priced below Rs 5 lakh between December 2025 and early January 2026.
These figures have come as a lifesaver for big companies like Maruti Suzuki, which show that the Indian buyer is now again turning towards savings and mileage.
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The main reason for the surge in sales of small cars was the cut in GST. The government had cut GST rates in September last year.
Recently, the tax rates on budget segment cars have been rationalized by the government under 'GST 2.0'. Due to reduction in GST rates, the on-road price of these cars has come down significantly, making it easier for the middle class to buy a car.
According to statistics, there has been a growth of more than 35% in the demand for budget cars in small cities and rural areas. Better infrastructure and improvement in farm income have also motivated people to buy their first car.
Amid rising petrol prices, small cars' excellent mileage (up to 25 km/litre) and low servicing costs still remain the first choice of customers.
The 92% growth in entry-level cars amid the growing trend of SUVs proves that “affordability” is still the biggest factor in the Indian auto market. Car companies believe that if this trend continues, the year 2026 could prove to be a record-breaking year for Indian automobile history.