Tata Motors Fixes Gaps in Car Business Service and Software in FY25

FY25 may have brought only modest growth for India’s third-largest passenger vehicle maker. Still, for Tata Motors, it was a critical year of introspection, repair, and laying the foundation for sustainable success.

Described by its top management as a “year of consolidation,” FY25 saw Tata Motors step back from aggressive expansion to focus on the fundamentals—fixing service bottlenecks, addressing product quality issues, and rebuilding customer trust in areas that had faltered, despite the company’s surging popularity in SUVs and EVs.

“We placed disproportionate focus on aftersales and product quality in FY25. Customer experience was under pressure, and we acted decisively,” said Shailesh Chandra, MD of Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility, during the Q4 FY25 earnings call with analysts.

Service Capacity Gaps Plugged in 21 Hotspot Cities
Tata Motors faced mounting customer dissatisfaction in key urban markets due to inadequate service capacity. The company identified 21 hotspot cities where customer experience was suffering and prioritized adding service bays and strengthening operational bandwidth.

“We are now comfortable in 16 of those cities, having expanded presence and capacity aggressively,” Chandra said, indicating that the aftersales turnaround is well underway.

Additionally, during the second half of the fiscal year, the company added 73 new outlets across the country—part of a broader push to improve network health rather than just expand it. Several dealerships were also supported with interventions to improve operational metrics and profitability.

Product Quality: Tackling Software Woes Head-On
Even as Tata Motors gained ground in EVs and tech-laden models, it ran into trouble with software integration, leading to glitches that impacted user experience.

“We encountered product quality issues, especially on the software side. While we fixed them fast, we also implemented deeper process corrections related to software integration and validation,” said Chandra.

The fix wasn’t just technical—it was structural. Tata Motors reassessed its entire product validation workflow, improved coordination between R&D and quality teams, and reworked how digital systems are tested before deployment.

Rebuilding Before Scaling Again
The decision to consolidate rather than chase volumes was a strategic one. While Tata Motors saw strong traction in CNG vehicles (growing 60% YoY) and held onto a 55% market share in EVs, it lost ground in hatchbacks due to an aging Tiago and Altroz lineup.

However, FY25 wasn’t about headline growth; it was about fixing what could have undermined future momentum.