How Tata Motors charted a turnaround and became the third big auto OEM in FY2021


Tata Motors has registered an impressive 69% YoY growth in the last financial year with 222,011 units sold in 11 years in FY2021, despite the zero sales in April 2020 due to the Covid lockdown. As compared to that, Tata Motors sold 131,197 units in FY2020. This sales surge resulted in the automaker reaching the top 3 positions in the Indian auto manufacturers’ rankings.

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The sales surge came at a time when the overall auto industry recorded a decline in sales owing to the strict lockdown, dampened customer sentiment, supply chain issues among others.

This was the first time in eight long years when the homegrown auto manufacturer’s passenger vehicle business recorded its highest-ever annual sales. Also, this is the first time when Tata Motors is advancing towards a double-digit market share in FY2022.

No wonder, the latest generation of passenger vehicles including the models like Tiago, Tigor, Nexon, Harrier, Safari, and even the Nexon EV too have helped the automaker to charter a turnaround in the highly competitive Indian PV market, where Maruti Suzuki dominates with nearly 50% market share. Among the top three automakers in the Indian PV market, except Maruti Suzuki (1) and Tata Motors (3), the other brand is Hyundai (2).

It was not very long ago when Tata Motors was in turmoil. It was losing market share despite introducing a revolutionary product like the Tata Nano small hatchback, which failed to live up to the expectation. The automaker was being p[ortrayed as an outdated automobile brand with serious quality concerns about its products.

The quality, cost, and lack of products in its portfolio were resulting in the automaker drawing a lot of flak, as the OEM was largely dependent on entry-level products like Indica, Indigo CS, etc. The carmaker was more inclined towards the fleet segment, instead of individual buyers. The OEM was becoming a discounted car brand and the majority of business was coming from taxi operators. At the same time, the other car brands were introducing new products that were gaining attention in the individual car buyer segment.

Back in FY2015, Tata Motors was struggling to achieve the volume, and competitor brands such as Mahindra & Mahindra and Honda were overtaking Tata in terms of sales. Its market share was merely around 5%. The automaker’s business was not profitable in terms of both OEM and channel partners.

However, from there, the homegrown automobile brand has made a dramatic turnaround in terms of brand image, brand value, and sales volumes, in the last half a decade, and the best result was visible in the last financial year. Data shows the carmaker gained an 8.2% market share in FY2021, as compared to the 4.6% market stake registered in FY2020.

The automaker’s cumulative sales volume in the last fiscal was nearly 66,000 units ahead of the fourth-ranked car brand.