‘Auto sales to soften in FY 2026, Tatas to bring back focus on hatchbacks’

Auto sales are expected to slow down in the upcoming fiscal because of a surplus of stock with dealers though Tata Motors will seek to woo back hatchback buyers by upgrading some of its models alongside its SUV launches later this year including the Harrier EV, according to a top executive at the auto company.

“I think it will be a little difficult to deliver growth in FY 2026, which will most probably be in the low single digits because we are coming on the back of three or four years of spectacular growth,” Vivek Srivatsa, Chief Commercial Officer - Tata Passenger Electric Mobility, told The Hindu at the ongoing Bharat Mobility Global Expo 2025.

The softening of growth is primarily due to surplus stock across the dealership network in the country. “So, potentially the dealers could sell to customers, but not uptake from the company,” Mr Srivatsa explained, adding that the excess stock was due to market remaining “challenged” in the second half of 2024, barring the two festival months of October and December.

In CY 2024, India’s passenger vehicle segment grew at nearly 4.5% with 43 lakh vehicles sold. For Tata Motors there were nearly 5.6 lakh cars and SUV sales, which was a 2% growth as compared to the previous year.

The auto-manufacturer which enjoys the largest market share (70%) in the EV segment showcased its Tata Harrier EV, and Tata Sierra ICE which are expected to be launched later this year. While the hatchbacks didn’t see any new launches, Tata Motors plans to bring back its focus on it to improve its market presence by upgrading models such as Tiago and Altroz as it believes that “growth will happen in two ends of the spectrum”.