Tata Motors eyes 20% PV market share by FY31, hints of another possible price hike

Tata Motors is expecting to cross a 15% market share in the Indian passenger vehicle market very soon. Also, the homegrown auto giant is aiming to grab a 20% market share in the segment by FY31, which was the company's previously stated target. To achieve this target, Tata Motors is planning fresh investments in new product categories, faster product interventions and powertrain expansion, said Shailesh Chandra, Managing Director and CEO, Tata Motors. Also, he has warned of prospects for another price hike as the automaker braces for another hit to profit margins from a significant increase in commodity costs.

Tata hints at another price hike

Tata Motors has hinted at the prospects for another price hike in the near future as the automaker is bracing for another hit to profit margins from a significant increase in commodity costs, though its bigger concern is how long the uncertainty will last. The Middle East conflict has pushed up costs of energy, freight and raw materials, forcing companies to absorb some of the increases or pass them on to customers, who are turning to alternatives such as electric vehicles to save money. Tata Motors' profit margin was hit by 4% in the prior period.

Chandra said that commodity inflation is expected to have a further margin impact of 3% of revenue at Tata's passenger vehicles division in the July to September quarter. "The greater worry is the uncertainty. Whether this is all that was supposed to happen or whether a part of the commodity side will keep being uncertain and be under pressure," he said, while adding, "It is not possible to pass on these increases to the market at the speed at which costs have increased ... which creates immense margin pressure." He also added that Tata had hiked car prices by less than 5%, but an increase was in the offing. However, Chandra gave no details of the likely timing of the price hike.

Tata eyes 20% PV market share by FY31

In an interaction with PTI, Chandra reportedly said the company's passenger vehicle business, which became a standalone entity following the demerger effective October 1 last year, has grown nearly 40% over the past year and is exiting September 2026 with electric vehicles accounting for more than 25% of its total sales. "Our focus is going to be, of course, to drive significant growth, double-digit growth. At the same time, we want to be leading the charge as far as the sustainable or zero-emission powertrains and emission-friendly powertrains are concerned, and at the same time, we have to continue to invest more aggressively, not only into new product categories, creating white spaces, but also in terms of faster change of interventions of the product to keep it relevant, to keep it competitive, to continuously keep it exciting for the customers," he said.

Elaborating on the company's performance during the last one year, Chandra reportedly said that in the last one year, the number of refreshes, facelifts and new launches have helped the OEM to clock nearly 750,000 vehicles by September 2026. "So the business would have come to that level, and we have grown in the last one year by nearly 40%. So that's significant growth that we have been able to achieve, and in this period, we have also been able to take the electric vehicle penetration, as we are exiting this month, to greater than 25%. So we are very close to 15% already, market share. So that 15% should happen, you know, very soon. But the next 5% is going to come in the next five years," he said.

Interestingly, Tata Motors has already stated its ambition of reaching 1.2 million annual sales and 20% market share by FY31. "We have already stated that in the next 4-5 years, we want to be 1.2 million annual sales, 20% market share, and that would mean a very agile way of working, and that is what the focus of this company is going to be," Chandra emphasised.

The company is also significantly focusing on electric vehicles, as the higher fuel prices stemming from the US-Iran war have boosted sales of electric vehicles and cars using CNG as buyers move away from petrol and diesel to save on running costs. Tata Motors has doubled its electric car production capacity to more than 16,000 units a month and continues to expand to meet growing demand, Chandra said. Electric cars currently account for 21% of Tata's total car sales in India, up from 14% last year, and the share of petrol and diesel has fallen to 52% from 59% over the same period.

Multipronged approach to achieve target

Tata Motors is focusing on a multipronged approach to gain market share and achieve its target, said Chandra. He said that the company sees multiple avenues for gaining market share, including segments where it is currently absent, changing affordability and demand at different price points, and faster-growing powertrains such as EVs and CNG. "I think it is in multiple directions. I would say one is those segments where we are not present today, where there are offerings in the market by other players; that is one clear growth axis. The other growth axis is that affordability in the country is shifting, right, and demand at different price points is also shifting, and there are certain places where demand is going to go very big in certain price points, and therefore, whether we can come up with more exciting white space offerings, that can be another one; those segments don't exist today, for example. The third axis is, of course, the powertrains. EV and CNG are going to grow much faster than the industry and fortunately, in both these two segments, we are the leaders with higher market share than our overall market share. So, on all three axes, we have a strategy to grow," Chandra explained.

New body-styles in pipeline?

Speaking on the future growth strategy to achieve its target, Chandra said the company would be focusing on segments where it currently has no presence. "So, at least let's take, for example, we might not be present in MPVs. We might not be present in certain kinds of lifestyle SUVs, right? Those would be some of the segments". This hints that the company might be focusing on bringing a new model in a fresh segment. Tata Motors is currently absent in two segments of the mass market space of the Indian passenger vehicle industry, which are the mid-size sedan and MPV.

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