New Delhi, Sept. 19 -- The Indian middle-class's long-standing love affair with the humble hatchback seems to be over. Once the undisputed first car for millions, models like the Maruti Alto and WagonR have been pushed aside by a new status symbol: the SUV.

But with the government's recent decision to slash the goods and services tax (GST) on small cars, a debate has ignited within the auto industry: can this tax break revive the dying hatchback segment, or have consumer tastes shifted for good?

India's top two carmakers, Maruti Suzuki and Hyundai, hold opposing views. Maruti insists that affordability has always been the key issue, arguing that rising safety and regulatory costs made small cars too expensive for many buyers.

Hyundai, ...