Expect SUV Contribution To Overall Sales To Go Past 70%: Tata Motors Passenger Vehicles MD & CEO

 Tata Motors Passenger Vehicles Ltd expects contribution of SUVs to its overall sales to go beyond 70% with it making foray into the fast growing mid-sized segment with a premium positioning of its Sierra model, according to its Managing Director & CEO, Shailesh Chandra.

At an industry level, the percentage of SUVs to overall passenger vehicle sales is likely to stabilise between 55% to 60% with GST 2.0 helping non-SUV segments grow but it remains to be seen if the growth momentum going forward can be maintained and how many new models are launched in those segments, Chandra told PTI in an interview.

The company is making a foray into the mid-sized SUV segment currently dominated by the likes of Hyundai Creta, Kia Seltos and Maruti Suzuki Grand Vitara by bringing back the popular brand of yesteryears, Sierra in a new avatar with introductory prices starting at ₹11.49 lakh, available in three engine options -- two petrol and one diesel.

The electric version of the Sierra will be launched in the next financial year.

"I believe that it can take us to 70%-plus," Chandra said when asked how the Sierra could enhance SUV contribution to the company's overall sales.

At present, he said it is around 65-70%.

In October this year, the company's overall retail sales were at 75,352 units, 13.52% from 66,903 units in the same month last year, as per FADA data.

"Post GST 2.0, I think the compact SUV segment and sub-compact SUV segment really went up in volume significantly. Since we were the market leaders in this segment with Nexon and Punch kind of vehicles, it gave us the boost that we were waiting for," Chandra said.

On top of that, he said, "With Sierra's strong value proposition, depending on how much volume we get, definitely it will mean a massive ramp up from where we were operating at 45,000 (units a month), I think we have done our homework." Chandra also said overall, the company is looking at enhancing its reach to 80% of the passenger vehicles market from the current 55%. It will look to fill gaps by entering new segments and expanding product range, while also working to introduce all-wheel drive mechanisms in future models, besides the Sierra.

While bringing the Sierra back, he said the company had to reimagine it in order to make it relevant not only to Gen X, but more to Gen Y and Gen Z.

"When we were reimagining this in its new avatar, we said, we have to build this fusion of originality by making it resemble what original Sierra stands for, but making it very modern, also to be relevant to Gen Y and Gen Z," Chandra said.

The company decided to position it in the mid-size segment which "is becoming the sweet spot of the market, because the footprint is just good enough to give a very spacious format" and provided a next level tech-stack such as three screen infotainment system, 5G connectivity and level two-plus ADAS (Advanced driver-assistance systems) in order to appeal to the Gen Y and Gen Z "who live a very digital life", he added.

Bookings of the Sierra starts from December 16 and deliveries will start on January 15, 2026.

When asked about the impact of GST rate reductions on sales of hatchbacks, Chandra said, "Yes, we did see a significant boost in volumes of Tiago as well as Altroz, but we saw bigger boost in compact SUV and subcompact SUV." Stating that there is a trend and aspiration for people to go for SUVs, he said,"If there is, at the same price point an SUV option, people prefer that more and that is very clear." Chandra further said the domestic PV industry has witnessed growth of 5% and 17% in the last two months respectively and "this month also can be a double digit growth for the industry".

"Therefore, if the industry keeps growing well, it creates space for both SUVs and hatches because post GST reduction, even hatches, MPVs and all have increased in volumes but since there are more launch activities in the SUV space, they should strengthen from where it is right now, at 55%," Chandra noted.

Total passenger retail sales in October this year stood at 5,57,373 units as per FADA data.