Following its strong performance in the sports utility vehicle (SUV) segment, the country’s second-largest carmaker --Tata Motors Passenger Vehicles or Tata.Cars is turning its attention to the smaller but growing compact sedan market. Unlike the two leading models in the segment which cater to both fleet operators and personal buyers with identical models, Tata Cars is positioning the Aeris exclusively for private buyers.
“Sedans continue to be an important part of the market with nearly 3.5 lakh customers choosing a compact sedan last year, reaffirming the category’s enduring relevance. However, a closer look at the category reveals 2 fundamentally different customer segments - fleet and personal,” said Shailesh Chandra, Managing Director & CEO, Tata Motors Passenger Vehicles.
Tata.Cars stated that the personal compact-sedan customer has been underserved despite accounting for nearly 65% of the segment. It added that buyers have largely had to choose from products designed largely for the very different requirements of fleet use. While fleet operators prioritise operating economics, durability and uptime, personal use customers additionally seek a design and feature-rich car that reflects their success and aspirations, it said.
The carmaker assured that Aeris will never enter the fleet segment, creating a clear separation between the two propositions and giving Aeris an identity unmistakably its own. The company will continue to address fleet requirements through the dedicated Xpres-T brand, with vehicles sporting a different design and product identity.
The Aeris is offered in Petrol and CNG powertrains. The introductory price for the model starts from Rs 5.29 lakh for Petrol and Rs 6.29 lakh for iCNG.
The compact sedan segment grew by around 25-26% in volume last year to nearly 3.5 lakh units, even as its share of the overall passenger vehicle (PV) market declined due to growing preference for SUVs. The Maruti Suzuki Dzire commands about two-thirds of this market, followed by Hyundai Aura and Honda Amaze.
While Chandra did not specify sales or market share expectations, he stated that they always want to be among the top-selling cars in whichever segment they want to be. “We have a certain number in mind. We hope, we get surprised,” said Chandra, adding that they remain open to bringing an electric vehicle (EV) version of Aeris in future.
He added that demand for EVs continues to outpace supply with the company increasing its production every month. For Tata, EV penetration has jumped to around 25% this year from about 14% last year. “Our monthly EV production capacity has more than doubled from an average of around 7,500-8,000 units last year to more than 16,000 units currently. We are working to increase production further each month,” said Chandra.
While a jump in petrol and diesel prices following the West Asia Crisis in late February prompted a shift towards EVs, Chandra said that the change has now become more fundamental due to the launch of new models, improving charging infrastructure and greater confidence in the new technology.
The rise in fuel prices has also led to greater adoption of CNG-powered vehicles whose sales grew 46% year-on-year, around twice the pace of the overall PV industry. In the compact sedan segment, CNG accounts for 60% of total volume, compared with around 20-25% for the overall industry.