Aiming to double market share to 30% in premium hatchbacks: Tata Motors

The hatchback segment for Tata Motors saw a degrowth of 12 per cent in FY25. Do you see a further decline in the category?

I think it will be too optimistic to say that hatchbacks will turn around and grow because the degrowth has been fairly consistent, not only in India but across the world. SUV preference has gone up. Europe has been traditionally strong on hatchbacks, but even there, SUVs have grown. The US market has been traditionally strong in sedans, but even there, sedans are going down, SUVs are going up, so the transition to SUVs is a worldwide phenomenon.

But if you look at India, 10 years ago hatchbacks were 50 per cent of the industry, today it is 21-22 per cent, but like I said within the hatchback category there is a little up and down going on, a lot of degrowth in the entry hatch, but there is a growth in the premium hatchbacks segment. We believe that the degrowth of the hatchback category is stabilised for now, and it will continue to be around 20 per cent of the industry.

How will Altroz facelift be positioned?

Most of the degrowth in the hatchback category is coming from the entry hatches, the sub-₹6 lakh category. A lot of first-time buyers are directly buying the premium hatchback category. The premium hatchback category is the largest sub-segment within hatchbacks, with over 32 per cent value. In numbers, it’s about 30,00035,000 units per month and 3.5-4 lakh units per year.

The consumers purchasing these cars are first-time buyers, but also aspirational people who are on the growth path. The consumers compare what is available in the SUV segment. We took cognisance of that and loaded Altroz as a complete product offering. We have invested in safety, it comes with six airbags as standard. Fundamentally, Altroz is a 5-star GN Cap product. We have incorporated features available in compact and mid-size SUVs into Altroz, combined with its premium looks.

We are positioning it for a consumer who is looking for a premium first car purchase. About 70 per cent of our buyers of Altroz are first-time car buyers, earlier it was 40 per cent.

How do you plan to strengthen sales in tier-2 markets with the Altroz?

We have a strong presence in tier-2 and -3. Since we launched Altroz in 2020, we have not been able to enhance in terms of the module of mid-cycle enhancement. While we delayed the mid-cycle enhancement, we are now making a huge change, and we are optimistic about making a big impact in this segment, which has only two or three other players. We expect an increase in our presence in the category.

How has the consumer demographic and purchase pattern shifted?

The premium hatchback market was metro-centric, mostly in the top six-eight cities when we launched. Today, tier-2 markets sell more premium hatchbacks than the top eight markets. There is a huge homogenisation.

Further, there is a downward trend in terms of age and career, as income levels have gone up.

What is the market share of premium hatchbacks? What is the market share that you are eyeing with Altroz?

Currently, we are at 12 per cent in premium hatchbacks, and we expect to double the market share. We will be closer to 30 per cent in the premium hatchback this year with Altroz.

Passenger vehicle sales have slowed down. Going forward, what is your expectation in FY26?

Consumer spending texture has changed. Initially, after Covid, personal mobility was prioritised, and people thought that they required their safe bubble of movement. Volumes have remained, and the industry has grown to an excess of four million, and it has remained at a high level. This year, we expect the growth to be moderated to around 4-5 per cent.

While 5 per cent does not appear to be a big growth, it is high in volume. What has changed is the cyclicity and seasonality of purchases. Consumers wait for the festival period for heavy discounts and new products. The overall volumes remain robust.