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Informist, Tuesday, May 13, 2025

By Anand JC and Pallavi Singhal

MUMBAI/NEW DELHI – In a bid to solidify its position as the market leader, Tata Motors Ltd. Tuesday said it will expand its portfolio of entry-level electric car segment going forward, where it holds over 75% market share. These city cars are priced less than INR 1.2 million. The Tiago and Punch maker wants to reduce the parity between pricing of electric variants and fuel-run variants, along with providing range comfort, the company's management told analysts in a post-earnings analyst call. 

Tata Motors said it sees intense competition in the mid-segment comprising cars priced between INR 1.2 million and INR 2.0 million. "This is where the whole action is, there are all the manufacturers coming with a product in this segment and therefore intensity will be high," the management said. Without specifying, the company said it will take some short-term and mid-term action to dominate the segment. Currently, Tata Motors has a 30-33% market share in this segment. The company sees it as a crucial segment where the maximum volume sales could take place.

The automotive giant also set its eyes on expanding focus in the fleet segment. "So far, we had addressed the issue of total cost of ownership against diesel but there's a big market of CNG (compressed natural gas) and this is where our focus is to ensure that the value proposition of our fleet product surpasses that of CNG," the company said. 

Cars running on CNG reported a volume growth of 30% year on year in 2024-25 (Apr-Mar), while Tata Motors reported a 60% growth in this segment. The company attributed this growth to its twin-cylinder portfolio and traction for the CNG variant of its crossover utility vehicle Nexon.

Sport utility vehicles continued to be the flavour of the town in 2024 even as other segments of passenger vehicles saw a muted demand. Tata Motors' retail market share fell to 13.2% in FY25 from 13.9% in FY24. The company pinned the blame for this decline on hatchbacks and sedans. Despatches of the two segments at an industry-level contracted 12% on year in FY25, Tata Motors said. 

Demand for the company's hatchbacks fell mainly because of an ageing portfolio. "The big problem for us last year where we witnessed the decline in our volumes and market share was because of hatchbacks and mainly two products which is Tiago and Altroz, which were in their fifth year and therefore it was ageing and that led to significant decline in our hatchback volumes," Tata Motors said. 

Tata Motors introduced the refreshed model of the Tiago in the March quarter, which saw good market traction, it said. The Altroz, which was launched in 2021, will see a mid-cycle enhancement and is slated for a launch in May. "...with all the actions we believe some of the market share decline that we have seen through the year we should be able to do things," the company said.

On its commercial vehicle business, the company said the recent skirmish between India and Pakistan created some headwinds for its operations in the last two weeks in the northwestern states. Overall, it expects a single-digit growth across all of its commercial vehicle segments, but a slightly better growth for the heavy commercial vehicles, medium-heavy commercial vehicles, and buses. The intermediate light commercial vehicles and pickup segment could see a slightly lower growth, the management said. Starting September quarter, Tata Motors expects this business to report a better year-on-year growth mainly led by the base effect.  

Its UK-based Jaguar Land Rover business, which contributes a little over 70% to its overall revenues, is currently facing significant headwinds owing to the evolving tariff turmoil. The company acknowledged the recent trade deals signed between the UK and the US, which cuts tariffs significantly from April levels, but still is 300% higher compared to the previous year.

In its investor presentation, the company did not provide a guidance for this luxury four-wheeler business. "It would be inappropriate for us to give firm earnings guidance for FY26 less than a week after the framework of the US-UK trade deal was announced. We'll see you again on our Investor Day on Jun. 16 and give you an update then," the company said.

Tata Motors disclosed its March quarter earnings post market hours. It reported a consolidated net profit of INR 84.7 billion on revenues of INR 1.195 trillion. Tuesday, its shares closed at INR 707.7 on the National Stock Exchange, down 1.8%.  End

Edited by Akul Nishant Akhoury

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