Tata Motors foresees PV sales growth to be in low single-digit in FY26, hatchback to bounce back

In an interview with the news agency PTI, Shailesh Chandra, Managing Director of Tata Motors Passenger Vehicle Ltd and Tata Passenger Electric Mobility Ltd. said that the automaker is going with the triangulated view coming from various agencies, forecasting agencies, as well as the view of SIAM members…indicating a similar kind of moderation as was in FY25. “The scenario at this stage, as we are speaking, looks to be pretty much similar to the FY25 situation, because in the last five to six months, we have not seen significant shift either way,” he said, adding that the benefit of income tax relief on annual income of up to ₹12 lakh announced in the Union Budget is yet to be reflected in the market.

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After witnessing a robust growth in the past two to three years, passenger vehicle sales in India had moderated on a high base due to various factors, including high inflation and weak consumer sentiment, especially in the urban market. According to the data released by the Federation of Automobile Dealers Associations (FADA), retail sales of passenger vehicles in the domestic market grew by 4.9 per cent at 41,53,432 units in FY25 as compared to 39,60,602 units recorded in FY24. Speaking of Tata Motors, its passenger vehicle retail sales declined marginally to 535,960 units in the FY5, as compared to 539,567 units sold in FY24, as per FADA data.

Tata Motors bets big on new Altroz for hatchback sales revival

The homegrown auto major launched its updated premium hatchback Altroz earlier this week. Tata Motors seems to be betting big on that to see a bounce back of hatchbacks. Launched at an introductory price, ranging between ₹6.89 lakh and ₹11.29 lakh (ex-showroom), the new Tata Altroz is available in petrol, diesel and CNG powertrain options, while transmission choices include a manual gearbox, a dual-clutch automatic unit, as well as an AMT. Chandra has stated that the company is betting big on the new Altroz to bounce back in the segment. However, it has paused plans to introduce an electric version of the Altroz due to overcrowding in the price segment in which it was envisaged to be positioned.

The auto company is looking to regain 25 per cent share in the premium hatchback segment, having seen it fall in the last one and a half year, said Chandra. The new Altroz comes revising its competition with rivals such as the Maruti Suzuki Baleno, Hyundai i20, as well as the Toyota Glanza. “With the new Altroz, we should see a significant growth. While the hatches might still see a decline this year at an industry level, with a low base that we have, and which was the key reason for our market share pressure, that should revive. On the SUV side, hopefully the market will keep growing,” Chandra said while also noting that due to ageing, Altroz sales had come down to about 2,000-2,500 units a month last year from a peak of about 6,000 units earlier. “Both Tiago and Altroz were aged, and therefore their demand had gone down. We lost about 50,000-60,000 units last year just because of the hatches going down,” he said.

The top Tata official also said that after the introduction of the new version of its mid-segment hatchback Tiago earlier this year, the model has regained its best monthly volume level of about 7,000 to 7,500 units. Chandra said that despite a rapid decline in the last five years in the overall hatchback sales in the Indian market to about 25 per cent of the overall PV market from 45 per cent earlier, there is a big opportunity in the mid and premium segment of the category. “The way we are seeing the hatch segment is that the entry hatchback segment will be under tremendous pressure…but two sub-segments within the hatchback are actually increasing in share. One is the premium hatchback segment, where we are positioned with Altroz, and the second is the mid hatchback segment, where we have Tiago,” he said.

In the overall industry, the hatchback segment is expected to do around 10 lakh to 12 lakh units annually, Chandra said, adding the share of premium hatchback within the overall hatchback segment has been increasing to about one-third. “So we find that this is a very promising segment for the future. The high-income households are going to double in the next five to six years. Nearly 65 million households will have income above ₹15 lakh per year, and this is the segment which would go for a premium hatchback to start with,” he noted. With over 10 lakh hatchbacks sold in the last three years, Chandra said, “We believe hatchbacks remain a critical part of India’s mobility landscape.”

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First Published Date: 25 May 2025, 09:52 AM IST