The target, shared with vendor partners, will require the automaker to grow almost twice as fast as the industry. On hybrids, the management said it plans to be reactive rather than proactive, adjusting its strategy according to market demand.
27 Sep 2024 | 5615 Views | By Ketan Thakkar
Tata Motors, the country’s third-largest car maker, has set a long-term target of achieving 1 million units in annual sales by FY30. The maker of Punch and Nexon SUVs has asked its supplier partners to be ready for sustained growth in the future, and assured them it will strive to ...
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Tata Motors, the country’s third-largest car maker, has set a long-term target of achieving 1 million units in annual sales by FY30. The maker of Punch and Nexon SUVs has asked its supplier partners to be ready for sustained growth in the future, and assured them it will strive to consistently outpace the market and enter new segments.
Going by the target, Tata Motors is looking to grow almost 50% faster than the market. On the base of 5.82 lakh unit sales in FY24, one million unit sales by FY30 implies a CAGR of 9.44%. During the same period, the Indian passenger vehicle market is expected to rise from 4.23 million to 6 million units.
The company also informed its business partners that it would consider expanding the addressable market from 54% to over 80%, which will help the brand outpace the market and gain a higher share.
An email sent to Tata Motors is yet to elicit any response.
A leader in the electric car space, the company has forecast that the market for battery electric cars will be 20% of the overall market by 2030. With the expansion of its portfolio to ten models, Tata Motors is looking at a 30% EV penetration in its sales.
The company said it is open to emerging competition in the electric car segment, and in fact, welcomes it. It believes that the newer players will accelerate the transition to the zero-emission vehicles.
“After adding Curvv, the company will likely add two new nameplates – the Sierra and Avinya - in the coming two years as it wants to expand its offering and add new buyers. The plan is to offer an electric powertrain across all segments to offer choice,” a person close to the company said.
The company has assured its vendor partners that it will continue to upgrade its internal combustion engine portfolio, given that over 80% of passenger vehicles sold by the end of the decade will be either petrol, diesel, or gas-powered cars.
Another person aware of the company’s plans said Tata Motors expects CNG powertrains to account for over a third of its sales in the coming decade. The company will continue to offer gas as a key alternative, which allows it to offer a broad price point.
Tata Motors anticipates its market share to grow to over 20% by FY30 and expects to corner almost 25% share in the vehicle segments it participates in.
Hybrid: A Reactive Strategy
Given the emergence of a hybrid vehicle as a new alternative in the marketplace, Tata Motors told its vendor partners that the company would be “reactive” to the technology instead of being “proactive,” given that it has firmly committed to zero-emission vehicles as a path to sustainability.
While the company continues to introduce new electric vehicles into its portfolio, the growth rate of BEVs has been slowing due to the emergence of strong hybrid alternatives from the likes of Maruti Suzuki and Toyota Kirloskar. Already, the share of hybrid vehicles has crossed 2% of the overall market, and it is growing faster than EVs.
Tata Motors’ comments indicate that its door is not closed to hybrids. If the penetration grows in the future, it will not hesitate to jump in, according to the understanding shared with the vendor partners.
Tata Motors is likely to invest over Rs 45,000 crore in its passenger vehicle business by FY30, and about a third of it will go towards battery electric vehicles.
On the capacity front, the company stated that the Pune factory and the recently acquired Sanand plant in Gujarat could produce about 1 million units between them.
Regarding the potential new factory in Ranipet in Tamil Nadu, the company was non-committal about its role in the immediate future, and said both the Gujarat and Maharashtra factories have adequate capacity to meet the company's immediate growth needs.