Tata Motors Expects PV Industry to Grow 10% in FY27, Despite West Asia Risks

Tata Motors Passenger Vehicles Ltd expects India’s passenger vehicle industry to grow around 10% in FY27, supported by strong demand momentum seen after GST 2.0, said a senior company official. The company is targeting industry-beating growth, backed by new launches, capacity ramp-up and a strong SUV, CNG and EV portfolio. 

Shailesh Chandra, Managing Director and Chief Executive Officer, Tata Motors Passenger Vehicles Ltd, said demand remained strong in April and May despite geopolitical tensions, and the momentum created by GST 2.0 continues to sustain.

“I am very confident that industry growth can still be around 10% in FY27. It may move 1-2 percentage points either way if there is a significant impact from geopolitical tensions, fuel prices or any other factor. But the industry seems to be on track for around 10% growth,” Chandra said during the company’s post-earnings media call.

Tata Motors PV, he said, will aim for “industry-beating growth” in FY27. The company plans to capitalise on the demand through new product launches and additional volumes from recently launched models. It will also ramp up capacities for new launches, while strengthening supply-chain resilience to manage risks linked to the West Asia situation.

“There is no question of changing the long-term product plan. We remain optimistic. There is also no question of stopping or postponing any of our capex on products,” Chandra said.

Record FY26 volumes

The optimism follows a strong FY26 for Tata Motors PV. The company sold 6.42 lakh passenger vehicles in FY26, up 15.3% year-on-year, nearly twice the industry growth rate. Its Q4FY26 wholesales stood at 2.01 lakh units, up 37.3% from 1.47 lakh units in the year-ago period.

In the March quarter, the automaker’s revenue from the passenger vehicle business rose 49.4% year-on-year to ₹18,742 crore in Q4FY26. EBITDA margin improved by 150 basis points to 9.4%, and profit before tax before exceptional items stood at ₹1,102 crore, compared with ₹392 crore in Q4FY25.

For FY26, the company clocked a revenue of ₹58,465 crore, up 20.7%. EBITDA margin remained steady at 6.9%, and PBT before exceptional items stood at ₹1,436 crore, against ₹1,083 crore in FY25.

The company said it achieved its highest-ever annual PV volumes and became the number two player on Vahan registrations in the second half of FY26. Its Vahan market share stood at 14.2% in Q4FY26 and 13.6% for FY26.

EV, CNG and SUVs drive momentum

Tata Motors’ performance was helped by a broader shift towards SUVs and cleaner powertrains. The company’s FY26 powertrain mix stood at 46% petrol, 13% diesel, 14% EV and 27% CNG, reflecting the rising share of alternate powertrains.

The company reported its highest-ever annual EV sales at 92,200 units in FY26, up 43.3% from 64,300 units in FY25. In Q4FY26, EV offtake volumes rose 69.2% year-on-year to 26,900 units. Tata Motors PV’s EV Vahan market share stood at 40.2% for FY26 and 40.9% in Q4FY26.

Chandra said EV enquiries and bookings have improved since March, helped by fuel-price concerns linked to the Middle East crisis and the government’s renewed push towards electric mobility.

“If I isolate the impact of the Middle East situation, we have seen a 25-30% jump in bookings. If there is any potential increase in petrol or diesel prices, that should further become a tailwind for EVs,” he said.

He added that a sharp rise in petrol or diesel prices could also change powertrain preferences, with electric and CNG vehicles gaining at the expense of conventional fuels. However, he said overall PV demand remains strong for now.

Capacity and launch pipeline

Tata Motors PV plans to increase production to meet demand from recent and upcoming launches. The company said its FY27 focus areas include new product launches, network expansion, capacity expansion for new launches, supply-chain resilience, cost reduction and higher leverage from scale.

The company launched or refreshed several products during FY26, including the new Sierra, new Tata Punch, Harrier.ev, new Punch.ev and petrol versions of Harrier and Safari.

Chandra said capex plans remain intact. Tata Motors PV typically guides for capex at 6-8% of revenue, but given the company’s aggressive growth path, it could be around one percentage point higher.

On profitability, Chandra said the company will focus on cost reduction, richer product mix and scale-led operating leverage to offset commodity inflation expected in the first half of FY27.

“Price is something we will actively consider in the coming months. The idea will be to protect the customer value equation where we can, but act on pricing where we must,” he said.

Commodity inflation remains a risk

The West Asia crisis remains a key risk for automakers because of its impact on fuel prices, commodity costs, supply chains and logistics. Chandra said commodity inflation has been significant over the last nine to 12 months across steel, copper, precious metals, aluminium, rubber and petroleum-based inputs.

He said the overall commodity cost increase over this period would now be around 5%, including the impact seen in the current quarter.

“This is a very tough situation for us. We are watching the movement closely. It will remain volatile, but we are intensifying cost-reduction actions across the organisation,” he said.
On battery costs, Chandra said cell manufacturers have indicated a possible increase in lithium-linked prices. Regulatory actions in China could also affect cell prices, though he said there is nothing “very concerning” at this stage.

Rivals also see strong FY27

Tata Motors PV’s outlook is in line with the broader optimism among leading passenger vehicle makers.

Maruti Suzuki India expects the domestic passenger vehicle industry to grow around 10% in FY27, supported by GST-led affordability gains and sustained demand momentum, though it has flagged the West Asia conflict as a key monitorable. 

Hyundai Motor India has projected 8-10% growth in both domestic sales and exports in FY27, supported by two upcoming SUV launches, higher operating leverage and a stronger export mix, according to Autocar Professional. 

Mahindra & Mahindra expects mid-teens growth in its SUV business in FY27, aided by sustained demand and capacity expansion. The company is also ramping up monthly SUV capacity during the year.

The SIAM Looking Ahead Conclave had estimated passenger vehicle growth in the 5-7% range for FY27, based on projections from research firms such as S&P Global, Crisil and ICRA. 

For Tata Motors PV, FY27 will be a year of balancing growth and cost pressure. Demand remains strong, EV bookings are improving, and new launches are expected to add volumes. At the same time, commodity inflation, fuel-price volatility and supply-chain risks linked to West Asia remain important watchpoints.

Chandra said the company will continue to build on the momentum of FY26 through new launches, higher production, cost actions and a multi-powertrain strategy.

“We will continue to sustain our growth trajectory, ramp up production and ensure greater resilience in our supply chain to navigate the West Asia situation,” he said.