Tata Motors PV's ₹40,000 crore capex plan unchanged amid group’s leadership change; further price hikes likely

Tata Motors Passenger Vehicles (TMPV) will not alter its ₹40,000 crore investment roadmap or broader growth strategy following the planned change at Tata Sons, a senior company official said on Thursday, while indicating that further price increases could be required as commodity costs continue to put pressure on margins.

“We have a clear strategy and a strong management team focused on execution. The company operates through a robust governance process and long-term strategic plans,” TMPV Managing Director and CEO Shailesh Chandra told reporters during the post-Q1 FY27 earnings call.

He went on to add ,“We remain fully focused on driving growth and creating sustained value for our stakeholders. I have already confirmed that our capex plans and all are not going to change.”

The comments assume significance a day after Tata Sons Chairman N Chandrasekaran, who is also the non-executive Chairperson of TMPV, announced that he would step down when his current term ends on February 20, 2027, and would not seek another term.

TMPV had announced in June that it plans to invest up to ₹40,000 crore over the next five years, targeting a 20% share of India’s passenger vehicle market by FY31. The company plans six new models by FY31 and aims to take annual production capacity to 13 lakh units within two to three years.

Further price increases may follow commodity pressure

The investment commitment comes even as TMPV faces rising input costs. Chandra said the increase in commodity prices during Q1 was equivalent to nearly 4.5% of the domestic business’s revenue, although the company partly offset the impact through cost reduction and a better product mix.

“If this kind of increase had not occurred and it had been a normal quarter, our margins would have increased considerably,” he said. Chandra warned that commodity pressure would intensify in the second quarter and said TMPV would combine faster cost reduction with calibrated and progressive price increases.

“Commodity prices will again affect us severely in the second quarter (July-September/Q2). It is not just Tata Motors — the industry will face additional increases beyond the 4.5% impact I mentioned for Q1,” he said.

Another major overseas market in sight

TMPV is also preparing to widen its international footprint, with Chandra saying the company expects to enter another major overseas market by the end of FY27 or early FY28.

“There will be either at the end of this financial year or maybe early next financial year we will open another big market,” he said.

“We have in the next two to three years some key focus markets identified... which would be ICE-focused markets as well as EV-focused markets,” Chandra added.

South Africa is currently driving export growth, with the company expanding its product portfolio and dealership network after re-entering the market in 2025. TMPV sold 2,408 vehicles in international markets during Q1, up 148% year-on-year.

Industry growth seen above 10% in FY27

Chandra expects the domestic passenger vehicle industry to grow 15–20% in the September quarter, with the first half benefiting from a favourable base. Growth is expected to moderate to single digits in the second half as the industry faces a higher base following the demand increase after the implementation of GST 2.0.

“At a full-year level, therefore, given that H1 is going to be significantly high in terms of growth rates... H2, even if it is in single-digit growth, it should be safely crossing 10%,” he said.

TMPV itself reported total passenger vehicle sales of 1,82,574 units in Q1 FY27, up 46% year-on-year, while domestic volumes rose 45% to 1,80,166 units. EV sales more than doubled to 34,467 units.

“Even for the entire year we were twice the industry growth. Even in quarter 1 we have been twice the industry growth. And I am sure that this momentum should continue for us,” Chandra said.

At the consolidated level, TMPV’s Q1 FY27 net profit fell 80.3% year-on-year to ₹775 crore, while revenue increased 9.3% to ₹95,799 crore. The domestic PV business reported a 64.8% increase in revenue to ₹17,930 crore, although higher commodity costs weighed on profitability. JLR’s weaker volumes and profitability also pulled down the consolidated result.