Tata Motors Closes In On Hyundai For India's No. 2 Carmaker Spot

Festive surge in cars sales underscores a looming shakeup in India's car market. Tata Motors Ltd. is inching ever so closer to edge out Hyundai Motor India Pvt. from the No. 2 spot.

Tata Motors' passenger vehicle sales have risen for five straight months as it continues to win share from Hyundai and Mahindra & Mahindra Ltd. The maker of Nexon sports utility vehicle is averaging 45,000-50,000 units a month, and is on track to hit 500,000 units in FY23.

The gap with Hyundai, however, has been narrowing for nearly half a decade as Tata Motors' share in India's market for cars and utility vehicles doubled to 13.8% as of March. The turnaround in fortunes is driven by new launches and bestsellers like the Nexon, catering to Indians' preference for roomier vehicles with higher ground clearance. In the market dominated by Maruti Suzuki India Ltd., nearly 40% of cars sold in country are SUVs.

Consumers prefer SUVs over hatchbacks and sedans, said Varun Baxi, a research analyst who tracks auto at Nirmal Bang Institutional Equities. Tata Motor's SUV pipeline is promising compared to that of Hyundai, he said, and that's why it's set to pip Hyundai to the second spot.

To be sure, Tata Motors monthly sales do not include numbers of its luxury arm Jaguar Land Rover. The Hyundai Motor Group-owned Kia India Pvt. separately has 6.9% market share as of October. 

Tata Motors, with a share of 14.3%, came close to edging past Hyundai (14.7%) in the first half of the fiscal 2023. In October, it was just 2,784 units short of overtaking the maker of Creta SUV. So far this fiscal, it trails by 15,339 units.

Tata Motors had beaten Hyundai in December and May.

Tata Motors is sustaining momentum on the back of demand for its conventional models as well electric vehicles.

The Nexon and the Punch are among the 10 highest selling passenger vehicles in India. Tata Motors sold 41,146 ICE-engine cars and 4,071 EVs, the highest monthly dispatches in the EV portfolio, in October.

As of now, EVs contribute 5-8% of the company's passenger vehicle sales and the company expects it to increase to 20% over the next three years.

Auto sales in India have rebounded from pandemic lows when chip shortage even prompted production cuts. Passenger vehicle sales have even breached pre-Covid levels.

As supply chain issues further ease, Tata Motor's EV portfolio is seen to have an advantage over peers as it has the most models by a single carmaker in the EV segment in India.

Apart from the Nexon EV, Tigor EV and the fleet-only XPres-T EV, Tata Motors also launched India's most affordable battery-powered car in Tiago.ev. Unveiled at an introductory price of Rs 8.49 lakh (all India ex-showroom), it received over 10,000 bookings on the first day, prompting the company to extend the offer on another 10,000 units.