Even though hatchback sales have been steadily declining over the last many years, Tata Motors believes there’s substantial opportunity in the small car segment, even at current volumes, with only a few players left. Speaking to our sister publication Autocar Professional, Tata Motors managing director and chief executive officer, Shailesh Chandra, said, “Even if the hatchback share stabilises at around 15-20 percent, we are still talking about a market which is more than a million units. That is a substantial opportunity, and there are very few players and less competition in this segment.”
Tata Motors to soldier on with Altroz and Tiago
Despite identifying an opportunity, Tata Motors does not plan to aggressively expand its hatchback portfolio. The company currently operates in the segment with the Tiago and Altroz. “We will not come with any additional hatchbacks, but possibly we will continue till we see that there is a reasonable level of demand for the two products that we have,” Chandra said.
Instead, the company is closely tracking how first-time buyers are redefining the entry-level segment. Chandra pointed out that a large part of traditional hatchback demand has already migrated to SUVs across sizes.
“There is a shift happening. In the last 5 years, hatchbacks have gone down from a share of 46-47 percent to 20-22 percent. We have seen that a significant part of hatchback buyers has shifted to not just compact SUVs, but midsize SUVs as well,” he said.
Rather than defending traditional categories, Tata Motors is trying to stay flexible on product form factors. “What is essential is that we should not box ourselves into the categories which exist,” Chandra added. “We should rather see how the price volume trends are shifting, how the budget of people is shifting, and which price points are becoming attractive.”
Sedans still have a market
Chandra also addressed the future of sedans, another segment that has steadily shrunk in India. He sees the market split into two distinct use cases.
“We see two types of buyers with sedans. One is the personal segment, and there is a fleet segment that continues to grow and does not ask for significant design innovations and feature innovations,” he said.
“I see that there is a segment out there. The highest-selling car last year was a compact sedan, so there is definitely some intrinsic demand,” Chandra said, adding that the lack of competition could still make the segment financially viable in the long term. “This may be a declining market, but it still has considerable size with few players. So, it is also an opportunity till it makes sense from a financial viability point.”
