Why Tata Motors PV is shifting its focus to premium cars

Tata Motors Passenger Vehicles, the maker of small cars like hatchback Tiago and subcompact sport utility vehicle (SUV) Punch, sees a clear strategic shift toward higher-value, premium segments, while reducing reliance on small cars by the end of the decade.

Speaking on the company’s evolving product and brand strategy at the Investor Day 2026, Tata Motors Passenger Vehicles Managing Director and CEO Shailesh Chandra confirmed that the shift is firmly toward premium offerings.

Chandra said that cars priced under ₹10 lakh are becoming increasingly unattractive from a volume-growth and profitability standpoint, as entrenched Japanese rival Maruti Suzuki, the biggest carmaker by volume, has built significant cost advantages over many years.

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“Less than ₹10 lakh cars are becoming lesser and lesser in terms of volume growth opportunity, and therefore that is one area where the cost positions accessed by some of the big leaders in that segment has reached a level where it is very difficult to match that, because it has happened over a period of 20 years, consistent strengthening of the cost position,” Chandra explained.

“Therefore, competing on cost and therefore generating margins in that segment is slightly difficult, but still can be done through surgical actions in the architecture. Whether it is worth investing in it is a question, but it is possible,” he added.

In the price segment under ₹10 lakh, Tata Motors sells the Tiago, the Punch, the Tigor entry sedan, the Altroz hatch, and compact SUV Nexon.

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The Tata Motors Passenger Vehicles CEO stressed that the company’s long-term focus is not purely cost competition but brand-led value creation.

“The status of Tata Motors as a brand, and what it used to be associated with in 2020 was significantly poor as compared to where we have reached,” Chandra said, adding that the journey towards a strong brand value is still a work in progress.

“There is a strong association of our brand on safety, design, and tech, which is getting established. The more we strengthen our perceptions around quality and service, I think by the end of this decade, you should be seeing a significantly enhanced brand position to help us command premium in whichever segments we play,” he noted.