Tata’s passenger vehicle (PV) business grew by 35 percent in its first year after the demerger, which came into effect on October 1, 2025, and separated the commercial vehicle (CV) business from the PV division. Domestic sales between October 2025 and September 2026 stood at 7.44 lakh units, well ahead of the industry’s roughly 22 percent growth. According to the home-grown brand, its market share increased to 14.1 percent, making it India’s second-largest carmaker over this period.

Factors behind the Tata PV business growth

Two SUVs and a GST cut did much of the heavy lifting

One of the major factors behind Tata’s strong numbers is the revised GST rates, which took effect on September 22, 2025. This was shortly before the October 1 demerger, and it made cars more affordable across multiple segments. Despite this, Tata Managing Director Shailesh Chandra admitted to being surprised. “We had not expected 35 percent,” he said.

According to Chandra, monthly bookings topped one lakh more often than not, and more than seven in ten of these typically turned into retail sales. Tata crossed the 70,000-unit mark in a single month twice, and two of its quarters went past two lakh units.

With sales of 2.38 lakh units and 2.33 lakh units respectively, the Nexon and Punch accounted for around 63 percent of Tata’s domestic volumes over this period. Sales of the Sierra, meanwhile, crossed 60,000 units between January and September 2026. This is despite supply being constrained even as production was being scaled up.

Tata EV and CNG sales make up nearly half of volumes

Tata Motors claimed that EVs and CNG cars accounted for 44 percent of its annual volumes, rising to about 51 percent in the July-September quarter. Sales of fully electric models were up 84 percent (at 1.3 lakh units), with the brand claiming a 42 percent share of India’s EV market. Sales of CNG models grew by 31 percent, registering over 2.03 lakh units.

However, each powertrain faces a different set of rivals. “For EVs, my competitors are different,” said Chandra. Product development for all powertrain categories now falls under a single chief product officer, though each gets its own dedicated team.

Tata Motors targets 12 lakh annual sales by FY31

Six new nameplates are on the way

Tata is targeting over 12 lakh units per year by FY31 (financial year 2031), with a 20 percent share of the Indian passenger vehicle market. According to Tata, the plan involves over 20 product refreshes and the introduction of six new nameplates, including the Avinya.

What the brand calls its “15 product interventions” over the past year included models such as the Sierra and Sierra.ev, the updated Punch, Punch.ev, Tiago and Tiago.ev, petrol versions of the Harrier and Safari, and the Aeris. The Indian automaker said that it’s also recalibrating launch timelines. This, it said, is to ensure that each new model gets proper marketing support and that dealers have enough time to sell them.

The recent surge in demand means production capacity has become an immediate priority for Tata Motors. The company stated that its plants and suppliers are stretched thin, particularly smaller tier-two and tier-three firms, and that it has had to work more closely with them to resolve shortages. More capacity will come online at Tata’s existing plants, with the Sanand facility playing a major role. Helped by Tata’s entry into South Africa, exports have nearly doubled, to around 12,000 units.

Tata Motors to triple service network and focus on quality

The brand said that its workshops will grow faster than its showrooms

Apart from focusing on growth, Tata Motors will also be paying attention to addressing the quality and after-sales perception. The quality department now reports directly to Chandra instead of to the manufacturing department, the Managing Director stated. Tata has also set up a central software integration team, which will eventually become a ‘centre of excellence’. Tata now also tests software and hardware together earlier in development. In fact, the Sierra is one of the first models developed this way, the company mentioned.

Another point of attention is the brand’s service network, with Chandra stating that Tata’s workshops now see about six lakh vehicles per month – this is up from around 1.5 lakh in 2021. “My showrooms will increase by two times. But my service centres will increase by three times,” Chandra said. The automaker has addressed 26 of the 30 locations that it flagged as service problem areas, with dealer incentives now placing more weight on customer experience.

Between April and June, the availability of spare parts was an issue. This, the company said, was due to labour constraints, when production was being prioritised. It’s providing existing customers first claim on spare parts even if that affects the production of new cars, with Chandra claiming fill rates are back at around 85-86 percent. Regardless, changes will take time. “The perception will only change after three-four years,” Chandra admitted. “After people really see the consistency of that.”

With inputs from Hormazd Sorabjee and Ketan Thakkar.