Tata Motors Expects PV Sales Growth To Be in Low Single-Digit in FY26, Hatchback to Bounce Back

Tata Motors expects to maintain low single-digit growth in passenger vehicle sales this fiscal in line with the overall industry estimate, with the company betting on premium hatchback sales to bounce back with the introduction of its all-new version of Altroz, a top company official said on Thursday.

The 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, Tata Motors Passenger Vehicle Ltd and Tata Passenger Electric Mobility Ltd Managing Director Shailesh Chandra told PTI here in an interview.

However, it has paused plans to introduce an electric version of the premium hatchback Altroz due to overcrowding in the price segment in which it was envisaged to be positioned, he said.

The all-new Altroz has been launched with introductory prices ranging from Rs 6.89 lakh to Rs 11.29 lakh across petrol, CNG and diesel variants.

"I am also 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," Chandra said.

He was responding to a query on whether Tata Motors subscribed to the Society of Indian Automobile Manufacturers (SIAM) estimate of around 1-4 per cent passenger vehicle sales growth for FY26.

"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 the benefit of income tax relief on annual income of up to Rs 12 lakh announced in the Union Budget is yet to be reflected in the market.

After witnessing robust growth in the past two to three years, PV sales in India had moderated on a high base due to various factors, including high inflation and weak consumer sentiment specially in the urban market.

As per Federation of Automobile Dealers Associations (FADA) data, retail sales of PVs in the domestic market grew by 4.9 per cent at 41,53,432 units in FY25 as compared to 39,60,602 units in FY24.

In FY25, Tata Motors' retail sales had declined marginally to 5,35,960 units as compared to 5,39,567 units in FY24, as per FADA data.

"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.

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, he noted.

"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.

However, he said after the introduction of the new version of its mid-segment hatchback Tiago earlier this year, the model has got back its best monthly volume level of about 7,000 to 7,500 units.

Chandra said 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 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 Rs 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." When asked about the electric version of Altroz which the company had earlier showcased to be positioned in the Rs 8-15 lakh bracket, he said due to the changing dynamics in the EV industry with battery prices coming down, the company has "paused" the plan.

"When we have three products, which are Tiago.ev, Punch.ev, and Nexon.ev supporting the Rs 8-15 lakh segment, we did not find a reason to right now position Altroz.ev as a fourth car in that segment where there is a certain size of that segment." He further said, "The (Altroz.ev) project has already reached a certain stage, but we have paused it because at some stage we felt that a fourth option need not be brought in the Rs 8-15 lakh segment at this stage." Chandra, however, added,"In future, if we see that there is a need to bring this car again, we will be open to that option, but for the time being, we are not launching it."