Home/ Companies / News/  Tata Motors’ Tiago, Tigor sales fuelled by EVs, CNG
Back

Tata Motors’ Tiago, Tigor sales fuelled by EVs, CNG

The homegrown automotive major’s electric and CNG variants saw hatchback Tiago and compact sedan Tigor contribute 54% to its overall combined sales of the two models between January 2023 and April 2023

Managing director at Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility Shailesh Chandra. (Photo by Punit PARANJPE / AFP) (AFP)Premium
Managing director at Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility Shailesh Chandra. (Photo by Punit PARANJPE / AFP) (AFP)

Tata Motors Ltd garners over half of its sales from powertrain options in the alternative fuel segment, namely electric and compressed natural gas (CNG), in models where it provides these options, according to data reviewed by Mint. This is primarily attributed to the availability of models equipped with these fuel alternatives.

The homegrown automotive major’s electric and CNG variants saw hatchback Tiago and compact sedan Tigor contribute 54% to its overall combined sales of the two models between January 2023 and April 2023.

In a recent interview with Mint, Shailesh Chandra, managing director of Tata Motors Passenger Vehicles Ltd and Tata Passenger Electric Mobility Ltd, said the Tiago EV, introduced last December, has surpassed Tata’s flagship EV, the Nexon, and accounts for an impressive 35% of Tiago’s total sales. Furthermore, an additional 23% of the sales are attributed to the CNG version of the vehicle.

Tata Motors data
View Full Image
Tata Motors data

Tata Motors will launch a new CNG and electric variant of two of its existing nameplates this year, in its bid to grow ahead of its peers, even as rivals line up multiple launches this fiscal, Chandra said, adding that the company expects to keep improving volumes and profitability in passenger vehicles as well as its passenger EV business from next year, as it introduces high-margin SUVs such as the Curvv and Sierra, along with EV offerings.

Its latest CNG model, the Altroz iCNG has a patented twin-cyclinder technology that frees up boot space. The firm expects 33% CNG penetration for the Altroz, which will help expand its sales from the existing 6,000 units every month, albeit with some degree of cannibalization.

“CNG models in the country are primarily personal-focused, contrary to the mainstream logic that they are primarily fleet-oriented. 80% of CNG PV sales are in the personal segment. We are seeing this segment grow on the back of the increasing number of CNG models, and growing infrastructure. But the models in the market have not been addressing the needs of the segment. There would have been an additional 10,000-15,000 customers every month for CNG if the boot space was not compromised. We have solved that with the Altroz EV and given it all the premium hatch features," Chandra said, adding: “We are seeing CNG capture the market, wherever diesel becomes unviable. However, we are not seeing high traction in CNG for SUVs because the price sensitivity in that segment is lesser and customers prefer more performance-oriented vehicles."

While the passenger vehicle market is expected to grow 6-8% this financial year, Tata Motors expects CNG sales that remained range-bound at 30,000-35,000 units per month for a while, will grow at least 10% with the addition of new models, and the expansion of the CNG infrastructure across India.“In the personal segment, people take a long-term view of the CNG prices and know the fluctuations in fuel prices happen across fuel types. We expect current volumes to sustain and grow."

Chandra said the semi-conductor challenge has “drastically reduced".

“General supply chain has improved, but the industry has found a structured way to deal with it. We have found ways to utilize standard chips, give longer-term schedule to suppliers and have established strong relationships," he added. Tata Motors is also likely to sustain volumes despite new nameplate launches on the back of a more positive outlook on chip supplies compared to competition.“Only last year we had a pressure of a steep 35% increase in cell prices, which we could not pass on to the market, as it would have led to a risk of destroying demand creation. We had inefficiencies in the ramp-up phase, but we were close to Ebitda-neutral in EVs in FY23. If you remove future capex from our fixed costs, we are in a profitable shape even now. We have also been responding with price-cut actions. We are trying to build a sustainable business and I am confident that this business was and will be very close to where we operate in the passenger vehicle business", Chandra added.

Ebitda is short for earnings before interest, taxes, depreciation and amortization.

“The mix can be slightly adverse on the electric vehicle side, but we will see how we will be offsetting that through our other actions. Entry into CNG will also be a profitable segment. In general, we are moving towards higher-margin products like the Curvv and Sierra. All the actions we are going to take on cost reduction, we should be able to bring down our breakeven points, too," Chandra said.

ABOUT THE AUTHOR
Alisha Sachdev
Alisha Sachdev is an assistant editor with Mint based in Delhi. She reports on the auto and mobility sector, with a special focus on emerging clean mobility technologies. She also focusses on developing multimedia properties for Mint and currently hosts the 'In A Minute' series and the Mint Primer podcast. Previously, she has worked with CNBC-TV18 and NDTV.
Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Updated: 25 May 2023, 11:56 PM IST
Next Story
Recommended For You
×
Get alerts on WhatsApp
Set Preferences My Reads Watchlist Feedback Redeem a Gift Card Logout