Tata Motors has reenergized the premium hatchback segment where it has competitors like Maruti Suzuki Baleno, Hyundai i20 and Toyota Glanza as well.
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Check OffersHatchbacks have been witnessing an ever-shrinking market share in the Indian passenger vehicle market over the last few years, owing to the rapidly rising pressure from SUVs and crossovers, as well as MPVs. The hatchback sales have slumped significantly over the past decade, despite once being the backbone of the Indian passenger vehicle market. While 10 years ago, the hatchback market share in the total industry sales volume was about 50 per cent, now it has come down to about 22 per cent. Following the demand and sales slump, key OEMs like Honda, Toyota, and Ford have called it quits from this space. Maruti Suzuki, Tata Motors and Hyundai currently continue to sell their respective cars in this space, but there lies the question: how long?
In such a situation, Tata Motors recently launched the updated iteration of its premium hatchback Altroz at an introductory price of ₹6.89 lakh (ex-showroom). The 2025 Tata Altroz facelift comes with a host of updates enhancing its upmarket quotient, reenergising the segment where it competes with rivals such as Maruti Suzuki Baleno, Hyundai i20 and Toyota Glanza. The OEM has already revealed that it is betting big on the new Altroz for the hatchback segment to bounce back. HT Auto had an exclusive interaction with Vivek Srivatsa, Chief Commercial Officer of Tata Passenger Electric Mobility, where he said that premium hatchbacks will play a crucial role for the existence of hatchbacks in the near future.
Premium hatchbacks will help the hatch segment to stay afloat
With the entry-level hatchbacks losing their value proposition to a larger number of car buyers owing to their increased cost, consumers have been exploring the idea of buying a larger car by paying a little extra, which in many cases is for premium hatchbacks. With the first-time car buyers showing interest in buying premium hatchbacks and this segment recording impressive growth from lower-tier cities, especially the tier-two cities, Srivatsa believes this category will play a key role in keeping the segment’s business afloat.
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According to him, for many first-time car buyers, purchasing a passenger vehicle is an achievement, not a sign of transactional ability. This is where the premium hatchbacks are playing a key role in winning consumer sentiments. The premium hatchbacks offer a greater value proposition compared to the entry-level models, with upmarket features at a slight premium pricing, without affecting the practicality and burning a hole in the consumers’ pockets.
Srivatsa believes that despite the massive slump in sales figures over the last decade, the hatchback segment will retain about 20 per cent of the total industry volume. A lot of this 20 per cent will come from premium hatchbacks, he believes. Exciting products will help this segment and the consumers in this space to reenergise. “Premium hatchbacks will actually define the entire hatchback segment,” said the top Tata Motors official.
Premium hatchbacks shaping consumer preference
Indian consumers have been evolving a lot in the last few years. When it comes to buying a car, Indian consumers seek more features, premium appeal, which is in sync with the overall consumer aspiration, witnessing an evolution across different sectors. Premium hatchbacks have played a key role in this evolution in the auto sector. Speaking about this, Srivatsa said that one of the major changes Tata Motors tried to bring to the new Altroz is equalising it with compact SUVs.
In fact, the new Altroz comes with design elements that are similar to the Tata Nexon, one of the most successful models from the brand. It was always that hatchbacks had slightly fewer features and compact SUVs had more of them. However, with the premium hatchbacks, those features are available in cars positioned lower than the C-SUVs. This is helping in reshaping the consumer preference in the Indian passenger vehicle market by encouraging many buyers to opt for premium hatchbacks instead of compact SUVs.
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First Published Date: 27 May 2025, 13:16 PM IST