After a gap of 10 years, Tata Motors has secured the number two position in the hatchback segment, driven by alternative fuel vehicles. The company has achieved this feat amid a declining trend in hatchback share in the overall industry (passenger vehicle) volumes.
While Maruti remains the strong number one in the hatchback segment with a market share of 70 per cent in Q1 of this fiscal, the company dislodged Hyundai from the second position.
“After more than a decade, we attained the Number 2 position in the hatchback segment, supported by our multi-powertrain strategy,” said Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles Ltd and Tata Passenger Electric Mobility Ltd, during the company’s Q1FY24 earnings call.
The alternative route
During Q1 of FY24, Tata Motors’ overall hatchback volumes stood at 42,036 units, an increase of 43 per cent over the previous year. Of the total volumes, sales of electric and CNG models accounted for 45 per cent at 19,084 units, up 105 per cent over Q1FY23 volumes. The company’s market share in the hatchback segment stood at 13.2 per cent in the June quarter.
Chandra said the Tiago.ev and Altroz iCNG helped increase volumes and market share in the hatchback segment. The company launched Altroz iCNG during the first quarter of this fiscal and it has received a strong response, while the Tiago.ev has also spurred its volumes, thanks to the company’s association with Indian Premier League and associated marketing events, which boosted the awareness level for the electric hatchback.
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Hatchbacks used to make up about half of the passenger vehicle volumes in the country about five years ago. However, the share of hatchbacks has been coming down in recent years. Its share has fallen from 47 per cent of the PV market in 2017-18 to about 34 per cent in FY23 and further to 32 per cent (about 3.2 lakh units) in Q1 of this fiscal.
Affordability has been the main factor for the decline. Hatchback prices went up significantly due to a rise in commodity prices, new regulatory norms, and a hike in registration charges across States, among others. On the other hand, there has been a shift in buyers’ preference towards SUVs. To take advantage of the market trend, PV makers focussed on launching more SUVs than cars and sedans.
UVs preferred
According to Crisil’s estimates, 43 car models (including hatchbacks and sedans) and 49 UV models were available for sale in FY18. However, the number of car models available fell to 25 in FY23, while the number of UVs on sale increased to 61. During the last fiscal, nine out of 10 new launches were in the UV segment and in this fiscal also four SUVs have hit the market.
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However, the growth of Tata Motors’ hatchback volumes, driven by battery-powered and CNG-powered hatchbacks, reflects buyers’ interest in alternative fuel vehicles due to better TCO (total cost of ownership) benefits when compared with petrol or diesel-powered vehicles.
There has been a surge in sales of CNG models after the price reduction of CNG prices a few months ago.
“As far as growth in hatchbacks is concerned, Tiago and Altroz will be our key focus as electric and CNG models are doing well,” said Chandra.