Gas Shortage May Force Tata Motors to Slash Sanand Output by Up to 50%, Informist Reports

Tata Motors Passenger Vehicles Ltd. is grappling with an acute shortage of natural gas and propane at its Sanand manufacturing complex in Gujarat, and may be compelled to cut production by as much as 50%, according to a senior official at Gujarat Gas Ltd., the company that supplies fuel to the automaker's plants, Informist reported.

The supply squeeze is a direct consequence of the ongoing military conflict in West Asia. Gujarat Gas, which pipes natural gas to both Tata Motors units at Sanand, confirmed it has been directed to halve industrial gas deliveries. "The military conflict in West Asia has seen all major gas suppliers in the country cut supply of natural gas for industry by 50%," the Gujarat Gas official told Informist. Tata Motors had been consuming roughly 24,000–25,000 standard cubic metres per day of natural gas and propane to keep both plants operational.

Why Gas Is Critical to Automobile Manufacturing

Natural gas and propane are indispensable in automotive paint shops. The gases heat large industrial ovens used to bake and cure water- or solvent-based coatings onto vehicle bodies — a process essential to durability and finish quality. There is no simple workaround: a car cannot be stored unpainted mid-line and reintroduced later for finishing. As a government official explained, stopping paint-shop operations effectively forces a shutdown of the entire production line. "The only alternative is to shut production of the entire line," the official noted.

Sanand Operations at a Glance

Tata Motors operates four production lines across two Sanand plants with a combined annual capacity exceeding 450,000 vehicles, scalable to over 600,000 units. One facility manufactures the Tiago and Tigor; the second hosts lines for the Nexon, Sierra, and Curvv — including electric variants. The company also runs a 400,000-unit-per-annum plant in Pune and is building a new 250,000-unit facility in Tamil Nadu.

Government Restricts Propane Supply

The situation is compounded by a parallel government curb on propane, which India imports primarily from West Asia. A government official confirmed that Tata Motors personnel have been scrambling to source alternative fuel, but may face a 50% production halt as early as Friday, when reduced supply takes effect. Industry typically relies on piped gas and does not maintain standalone fuel reserves, further limiting the company's ability to bridge the shortfall.

A Painful Blow at the Peak of a Sales Recovery

The crisis arrives at a particularly inopportune moment. Tata Motors Passenger Vehicles sold 63,331 cars to dealerships in February 2026, up 35% year-on-year. Domestic retail volumes rose 34% to approximately 62,329 units. The company commands around 45% of the Indian electric vehicle market, and February EV sales hit 8,385 units — a 57% year-on-year increase. Exports also surged, with 1,002 units shipped in the quarter, up 167%.

The supply disruption follows a challenging December quarter in which Tata Motors Passenger Vehicles posted a consolidated net loss of ₹34.86 billion on revenues of ₹761.70 billion, weighed down partly by the lingering effects of a cyberattack on its UK subsidiary Jaguar Land Rover in August. At the time of reporting, Tata Motors shares were down 1% at ₹351.45 on the National Stock Exchange.

Outlook Uncertain

Neither the duration nor the potential deepening of the supply cut is clear. When pressed, the government official offered a candid assessment: "No one has any idea as of now." An official response from Tata Motors is awaited.