Tata Motors PV Could Be Last Man Standing in India’s Hatchback Segment, Says Shailesh Chandra

Tata Motors Passenger Vehicles Ltd believes it could emerge as “the last man standing” in India’s hatchback segment, even as the category steadily loses share in overall PV sales, Managing Director and Chief Executive Officer, Shailesh Chandra said. The company sees a substantial opportunity in the small car segment, even at the current volumes, with only a few players left.

“There is a shift happening,” Chandra said. “In the last 5 years, hatchbacks have gone down from a share of 46-47% to 20-22%. All the facts show that the shift is imminent, and as more and more young customers, less than 35 years of age, come into the market, I think this trend will grow further.” 

Yet, even in decline, Chandra believes the numbers still add up. “Even if it (hatchback share) stabilises, at around 15-20%, we are still talking about a hatchback market which is more than a million units. That is a substantial opportunity, and there are very few players and less competition in this segment, so we can be the last man standing in this segment,” he said.

Despite identifying an opportunity, Tata Motors PV does not plan to aggressively expand its hatchback portfolio. The company currently operates in the segment through the Tiago and Altroz. “We will not come with additional hatchback, but possibly we will continue till we see that there is a reasonable level of demand for the two products that we have,” Chandra said.

Instead, Tata Motors PV is closely tracking how first-time buyers are redefining entry-level mobility. Chandra pointed out that a large part of traditional hatchback demand has already migrated to SUVs across sizes.

“Already we have seen that a significant part of the hatchback segment has shifted to not only entry SUV, but sub-compact, compact and mid-SUV,” he said. According to automaker’s internal data, first-time buyers account for nearly 55–60% of customers in compact SUVs, rising to about 70% in the sub-compact SUV space where the Punch operates.

Rather than defending traditional categories, Tata Motors is trying to stay flexible on product form factors. “What is essential to see is that we should not box ourselves into the categories which exist,” Chandra said. “We should rather see how the price volume trends are shifting, how the budget of people is shifting and which price points are becoming attractive.”

He added that this thinking underpinned products like the Punch, Curvv and the recently launched Sierra. “That is how we have come with Punch, that is how we have come with Sierra in a me-too product, that is how we have come with Curvv,” Chandra said

Sedans Declining, But Not Irrelevant

Chandra also addressed the future of sedans, another segment that has steadily shrunk in India. He sees the market split into two distinct use cases.

“Sedan we see in two parts, one is the personal segment and there is a fleet segment which continues to grow and does not ask for significant design innovations and feature innovation,” he said. While fleet demand remains stable, Tata Motors PV is still evaluating the personal-use sedan market.

“I see that there is a segment out there, if you see the highest-selling car last year was a compact sedan, so there is definitely some intrinsic demand,” Chandra said, adding that the lack of competition could still make the segment financially viable in the long-term. “This maybe a declining market, but still with considerable size with few players, so it is also an opportunity till it makes sense from a financial viability point.”

In 2025, India's passenger vehicle sector achieved its highest-ever annual wholesales, with a strong festive quarter acceleration propelling the industry to record dispatches of 44.90 lakh units, according to data released by the Society of Indian Automobile Manufacturers.

The passenger vehicle segment registered a 5.0% growth in calendar year 2025 compared to 2024, with the exceptional performance largely driven by a remarkable surge in the October-December quarter. After navigating supply-side challenges and subdued demand in the first half, the industry witnessed a sharp turnaround in the latter part of the year. 

Within the passenger vehicle category, utility vehicles continued to dominate shipments with 29.54 lakh units dispatched in calendar year 2025, showing a healthy 7.4% growth over 2024. Passenger cars recorded wholesales of 13.79 lakh units during the calendar year, registering a modest 0.6% growth. While growth was subdued compared to utility vehicles, the segment maintained stable dispatch volumes despite intense competition from the utility vehicle category.