Tata Motors bets on Altroz to 2x market share in premium hatchbacks

Tata Motors is betting on the second generation Altroz to double its market share in the premium hatchback segment to 25 per cent in the financial year 2025-2026 (FY26).  The 25,000-30,000 units a month premium hatchback segment accounts for nearly 6-7 per cent of passenger vehicle (PV) sales, and is dominated by models like Baleno of  Maruti Suzuki. The Altroz, launched in 2020, enjoyed a peak market share of around 27 per cent in the segment (around 70,000 units annual sales in 2023), and has not seen any major facelift in the past five years.  On Thursday, TaMo launched an upgraded Altroz priced between ₹6.89 lakh and going up to ₹11.29 lakh (ex-showroom, Delhi).  Hatchbacks contributed around 18.86 per cent share of Tata Motors PV sales in FY25, and the company had a 10.2 per cent share of market in the hatchback segment, and 11.5 per cent share in the premium hatchback category. 

 

  Speaking to Business Standard, Vivek Srivatsa, chief commercial officer, Tata Passenger Electric Mobility, said that for any product in their portfolio, the internal aspiration was to always be among the top 2-3 products of that specific sub-segment. “A successful product generally represents a 25-30 per cent share in that respective segment. Altroz had achieved a share of 25-30 per cent post its launch,” he said, adding that in the past year, we have seen Altroz volumes impacted due to product aging.  “The New Altroz significantly enhances the product with premium interior and exterior styling, tech, and safety enhancements. Leveraging the new refreshed Altroz, we aim to be among the top 2-3 in the segment and to achieve our rightful share. The current size of this segment is 25,000-30,000 per month with 4 players. As per this, we are looking at 6,000-70,000 units per month,” Srivatsa said.  As such, hatchbacks contributed around 22 per cent of PV sales in FY25. Premium hatchbacks are 31 per cent of the overall hatchback segment, which has grown from 10 per cent share around 10 years back. Srivatsa is hopeful that while the segment had seen a decline over the past few years, it would stabilise at his level, and would not fall further.  “We are not playing the entry-level game. We’ve consciously chosen to stay away from the bottom of the pyramid and focus on the premium hatchback segment, which offers better margins and a more engaged customer,” he said.  After Tiago saw a major update in January, it has seen 20 per cent growth in a quarter in which hatchbacks have not grown, he said.  “Tiago is our most successful nameplate in the entry hatch space. It sees the highest share of first-time car buyers, almost 70 per cent, and plays a crucial role in bringing customers into the Tata fold,” he said. 

  Tier-2 markets play a strong role in driving hatchback growth. Almost 44 per cent of Altroz sales come from tier-II markets. The share of first-time buyers is also increasing – from 42 per cent in 2020 to 69 per cent in 2025.  Tata Motors also has plans to launch an electric avatar of the Altroz, but Srivatsa did not comment on the timelines. “Electric is definitely part of our long-term plan. But we’ll only launch an Altroz EV when we can deliver strong range, performance, and cost parity with ICE,” he said.  The company is also exploring international markets for PV exports overall.  “We are exploring international markets as mentioned in the past. Currently, we export our cars to Nepal, Bhutan, Sri Lanka, and Mauritius. We have recently entered the Sri Lankan market with our ICE vehicles (Tata Punch, Tata Nexon, and the Tata Curvv) and the Mauritius market (Tiago.ev, Punch.ev, and Nexon.ev) with our EVs,” Srivatsa said, adding that it was part of their ongoing strategy.