Tata Motors expects under 5% growth in passenger vehicle sales this year

Rural markets outpaced urban demand last year and are likely to maintain their lead, supported by a favourable monsoon, said Shailesh Chandra, Managing Director of Tata Motors Passenger Vehicles.While the Reserve Bank of India (RBI) has taken measures on interest rates, the benefits take time to reach end consumers and depend on greater awareness.
“There are certain tailwinds definitely, but right now, as we speak, the trend that we see in the first few months is quite muted and in line with what the industry experts have been projecting a sub 5% kind of a growth right,” he noted.
The passenger and commercial vehicle manufacturer and parent company of Jaguar Land Rover (JLR), is currently facing increasing cost pressures stemming from steel tariffs and foreign exchange fluctuations. While a price hike is under consideration, no final decision has been made yet.On the supply chain side, Chandra noted that Tata Motors currently has sufficient inventory of rare-earth magnets to sustain production for a few more months. Beyond that period, the situation could tighten unless external interventions prove effective.

Collaborative efforts are underway involving the Ministry of Commerce, SIAM, ACMA, and diplomatic channels in China to ensure steady supply. While the company is optimistic about these efforts yielding a near-term resolution, it is also actively exploring alternative sources for the medium to long term.Despite the challenges, the company does not foresee any immediate need for production cuts. However, when it comes to entering the rare-earth magnet manufacturing space domestically, Tata Motors currently has no plans to diversify into this segment, even though it recognises its critical importance to the auto industry.

Chandra expects the electric vehicle (EV) industry to continue registering strong double-digit growth, driven by a surge in new model launches from multiple automakers. He believes market demand remains healthy, as recent responses over the past few months have shown positive traction, and the momentum is likely to sustain or improve in the near term.

On the product front, Tata Motors is expanding its EV portfolio with two premium offerings priced above ₹20 lakh. The Harrier.ev, which has already been launched, is set to begin deliveries next month, while the Sierra.ev is scheduled for launch in the second half of the current financial year.

According to Chandra, customer response in this higher-end EV segment has been very promising, indicating growing consumer interest in premium electric models.