Mumbai, May 25 – Tata Motors, one of India’s leading automobile manufacturers, has projected low single-digit growth in its passenger vehicle (PV) sales for FY26, aligning with the broader market forecast issued by the Society of Indian Automobile Manufacturers (SIAM). SIAM expects the Indian PV industry to grow between 1% and 4% in the current fiscal, signaling a cooling-off period after years of post-pandemic recovery.
According to Shailesh Chandra, Managing Director of Tata Motors Passenger Vehicles Ltd. and Tata Passenger Electric Mobility Ltd., the company’s growth outlook is based on a collective consensus drawn from forecasting agencies and industry associations. “The market environment hasn’t changed significantly from FY25, and the effects of the recent tax relief announced in the Union Budget are yet to reflect in consumer sentiment,” Chandra told PTI.
A High Base, Inflation, and Sentiment Dragging Growth
India’s PV segment witnessed 4.9% retail growth in FY25, with 41.53 lakh units sold, up from 39.60 lakh units in FY24, according to data from the Federation of Automobile Dealers Associations (FADA). However, Tata Motors’ own PV sales declined marginally to 5.36 lakh units, down from 5.39 lakh units in the previous fiscal, pointing to brand-specific challenges in a softening market.
Chandra attributed this slowdown to high inflation and muted urban sentiment, noting that the company particularly lost 50,000–60,000 units in hatchback sales last year due to ageing models like the Tiago and Altroz.
New Altroz Expected to Revive Premium Hatchback Segment
In an effort to reclaim its position, Tata Motors recently launched the updated Altroz, a premium hatchback offered with petrol, diesel, and CNG powertrains and three transmission choices—manual, AMT, and dual-clutch automatic. Priced between ₹6.89 lakh and ₹11.29 lakh (ex-showroom), the new Altroz is seen as a strategic move to bounce back in a segment that has seen Tata’s market share shrink over the past 18 months.
“The hatchback market at the industry level might still decline this year,” said Chandra, “but with a low base and the refreshed Altroz, we’re optimistic about growth in our volumes.” Altroz sales had previously slumped to around 2,000–2,500 units per month, from a high of 6,000 units, making the update a timely intervention.
No Electric Altroz for Now
Interestingly, Tata Motors has paused plans to launch an electric version of the Altroz, citing crowding in the intended price segment. Chandra stated that while the brand continues to focus on EVs, it will be more selective in terms of segment positioning to ensure profitability and competitiveness.
Hatchbacks Remain Vital to India’s Car Market
Despite a market shift toward SUVs, Tata Motors remains bullish on the mid and premium hatchback segments, which Chandra described as “still very relevant and promising”. Over the past five years, the hatchback share of India’s PV market has dropped from 45% to around 25%, largely due to rising SUV popularity. However, within the shrinking pie, premium and mid-hatchbacks are gaining ground.
The Tiago, after a mid-cycle update earlier this year, has seen a rebound to 7,000–7,500 units in monthly volumes, reinforcing Tata’s strategy to target value-conscious yet quality-seeking consumers.
Demographic Tailwinds Ahead
Chandra also pointed to long-term demographic trends as a major opportunity for growth in the hatchback segment. “Over the next five to six years, the number of households earning above ₹15 lakh annually will nearly double to 65 million. This group will likely start their premium car journey with a hatchback,” he said.
With over 1 million hatchbacks sold in India in each of the last three years, Tata Motors sees this body style as a critical part of the country’s mobility future, especially in the affordable-yet-premium segment where brands like Maruti Suzuki Baleno, Hyundai i20, and Toyota Glanza are major players.
Industry Outlook
With both Tata and SIAM projecting tempered growth, FY26 appears to be a year of consolidation for the Indian automotive market. Market watchers expect automakers to double down on product refreshes, affordability, and technology integration to drive sales in a more cautious, value-sensitive environment.
As Tata Motors leans on its renewed hatchback lineup and a strong portfolio of SUVs and EVs, it remains poised to navigate the challenges of a cooling market while reinforcing its role as a key player in India’s passenger vehicle segment.
Bhupendra Singh Chundawat is a seasoned technology journalist with over 22 years of experience in the media industry. He specializes in covering the global technology landscape, with a deep focus on manufacturing trends and the geopolitical impact on tech companies. Currently serving as the Editor at Udaipur Kiran, his insights are shaped by decades of hands-on reporting and editorial leadership in the fast-evolving world of technology.
Tata Motors Projects Modest Sales Growth in FY26, Banks on New Altroz to Revive Hatchback Momentum
