Tata Motors Targets Industry-Leading Growth in FY26 With Biggest-Ever Product Push

After four consecutive years of strong performance, Tata Motors witnessed a dip in both volumes and market share in FY25, a year marked by muted industry growth and internal restructuring. Describing it as a "year of consolidation," the company used the time to strengthen its fundamentals—fixing gaps in aftersales, addressing product quality issues, and reinforcing dealer readiness.

Now, with many of those course corrections in place, the automaker is setting the stage for what could be a breakout year. According to the company, FY26 will feature its most aggressive and diverse product rollout yet across hatchbacks, SUVs, CNG, and electric vehicles.

"FY26, as per the triangulated view that we see from various agencies and OEMs, is going to be moderate—pretty similar to what FY25 was," Shailesh Chandra, Managing Director of Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility, told analysts at the Q4 FY-25 earnings call.

"Our focus would be to deliver industry-leading growth, because this is possibly our strongest product cycle. It's a very strong year," he asserted.

In the fiscal year 2024–25 (FY25), Tata Motors reported total passenger vehicle (PV) wholesales of 553,585 units, marking a 3% decline compared to 573,495 units in FY24. This downturn follows years of growth and is attributed to several factors, including an aging hatchback portfolio, increased competition, and a notable decline in electric vehicle (EV) sales. Specifically, EV sales fell by 13%, totaling 64,276 units in FY25, down from 73,833 units in FY24.

Hatchback Portfolio Gets a Refresh

Aging models like Tiago and Altroz were among the key contributors to the company's decline in FY25. But Tata Motors is responding with targeted lifecycle interventions.

"We have already refreshed the Tiago, and we have seen a growth of 20 percent. We are also launching the Altroz this month, which saw a significant decline last year," Chandra confirmed.

"Both these products will have been addressed from a lifecycle intervention perspective."

SUV Range to Expand with New Powertrains and Variants

The SUV segment remains a pillar of strength for the brand, led by Punch and Nexon. Tata is now preparing to deepen its SUV strategy by introducing petrol variants of the Harrier and Safari, re-varianting select trims, and launching the long-awaited Sierra.

"Even SUVs are going to be strong. We will have multi-powertrain options on Harrier and Safari, including the petrol version. Also, we are going to launch Sierra," said Chandra.

He added that the Nexon CNG's full-year market impact, launched earlier this year, will also be significant.

High-Stakes Year for EV Expansion

Despite a decline in volumes, Tata Motors retained its leadership in the EV space in FY25, with a 55% market share. FY26, however, will be pivotal as it expands into premium electric segments.

"We are going to strengthen not only the value proposition of the existing products... but also add two new products—Harrier EV and Sierra EV," Chandra said.

"So it's going to be a strong year for us on the EV side as well."

The company also continues to invest in supporting the ecosystem, including charging infrastructure, fleet deployment models, and deeper customer engagement.

CNG Contribution Set to Rise

Thanks to innovations like twin-cylinder packaging and new launches, CNG has become one of the fastest-growing powertrains in Tata's portfolio.

"In the CNG segment... we were the fastest growing player with 60 percent growth," Chandra noted. "The share of CNG in our portfolio has gone up to 25 percent from just 7–8 percent two years back."

He added that Tata will continue expanding its CNG offerings in FY26.

Focus on Execution, Network and Profitability

In addition to new launches, Tata Motors is sharply focusing on brand consideration, retail readiness, and profitability improvement. After opening 73 new outlets in FY25 and addressing service capacity in key hotspot cities, the focus will shift toward expanding larger-format dealerships that can showcase a broader product range.

"Brand consideration, which got impacted last year because of customer experience issues, will see renewed focus this year," said Chandra. "We will also focus on skewing our stores toward larger formats, as the portfolio expands."

On the margin front, he added, "Cost reduction initiatives remain critical to ensure competitiveness and profitability in a tough environment. This engine has been delivering well for us and will continue."

Tata Motors Ltd reported that its net profit for the fourth quarter and full financial year 2025 plunged 51% and 28% on year, respectively. The significant drop in profit can be primarily attributed to a one-time tax gain recorded in the year-ago period. However, the company’s operating profit also fell as volumes were lower.

Revenue from operations during the quarter remained almost flat at Rs 119,502 crore while revenue for the full year increased marginally by around 1% to Rs 439,695 crore.