SUVs have become the most preferred segment with a shift in customers’ preferences. Riding on the SUV wave, Tata Motors on September 14 launched the Tata Nexon facelift at a starting price of ₹8.09 lakhs. In an interaction with Fortune India, Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles Ltd and Tata Passenger Electric Mobility Ltd says that the company aims for a 50% share of the domestic passenger vehicle segment.
"Every year you see the percentage increasing, and hopefully it will saturate after a certain time because we have a range of vehicles which are available from very affordable sub-compact SUVs like Punch and we have expensive SUVs as well. And till these segments and affordable cars have come, it has grown. But (SUV market share) should settle around 50%," says Chandra.
In FY23, the maker of Tata Punch, Tata Nexon, Tata Harrier and Tata Safari, led the SUV segment by clocking 31% market share. The four SUVs contributed 66% of the total volumes of 3.05 lakh units in FY23, according to Chandra. This volume is likely to go up with the upcoming launches by the company, especially in the electric vehicle segment in coming months.
Notably, Chandra feels that the festive season, which accounts for 26%-28% of the total automobile sales, will drive the company’s sales further despite inventory backlogs. "It might be (inventories level) different for different manufacturers and everyone is taking stock of the situation for different models. The good thing is that the festive season is appearing to be strong so will utilise this momentum to bring down the stocks where certain products could have gone up," says Chandra.
His statement comes after FADA (Federation of Automobile Dealers Association) raised concerns regarding the highest number of inventories in August this year. The industry body asked automakers for vigilante monitoring of the situation.
Meanwhile, amongst concerns raised by some automobile manufacturers regarding inflationary pressures and high-interest rates having an impact on prices despite the festive season, Chandra believes that it would have a limited impact on automobile sales.
"It (inflation) might have some impact on the prices, but generally speaking, I don’t see any signals," says Chandra.
Earlier this month, Tata Motors received ARAI (Automotive Research Association of India) certification for the central government production linked incentive (PLI) scheme worth ₹25,938 crore for automobile manufacturers. The government has extended the scheme till March 2028. Chandra says Tata Motors aims to consume the PLI amount before March 2028. "I am keeping my fingers crossed that I would not need that additional year and I should be able to consume my share of PLI much before that because the benefits are capped what one company can take and it is also a percentage of revenue you generate in the green mobility area. So we should consume it much faster," says Chandra.
Notably, like its peers, as the company focuses more on building a strong electric vehicle portfolio, Chandra says that Tata Motors would go for big upscaling. Addressing the dearth of talent to be a challenge as the industry transitions from ICE ( internal combustion engine) vehicles to electric vehicles, Chandra says, "There is a lack of talent and the talent gets upskilled for new technology. And this is what is going to happen. One that there are new areas and the kind of talent that has been required in the automobile industry, say more software. And the other sub-system technologies in EVs that we know don’t exist like the whole powertrain and e-drive is completely new, the power electronics and all go to the next level and electrical architecture also goes to the next level. So there are new competencies which are required. And this talent is not available. Even if they are available, they are being used somewhere else."
"So, it is a journey that we go through. Internally we are going for a big upscaling. Reskilling and upscaling are big levers where we want to transition people. Engineers want to be flexible when it comes to new technology and we have seen the response within the organisation, where people are keen to learn," he adds.
Notably, on September 14, the company launched the new Tata Nexon.ev at a starting price of ₹14.74 lakh. The top variant is priced at ₹19.94 lakh. The company plans to open a separate showroom for its flagship electric SUV beginning next year in a phased manner. The company, last month, unveiled a new brand identity, TATA.ev for its subsidiary Tata Passenger Electric Mobility. The company plans to launch four new electric vehicle models under its passenger vehicle segment by FY25. The company plans to launch the Harrier EV later this year and Punch EV and the new Curvv EV in the first quarter of FY25.