Tata Motors Passenger Vehicles Ltd. is optimistic about beating the Indian auto sector as a whole, which is predicted to increase by 10% in 2026.
“The (car) industry saw a decline in the first eight months of 2025, but it has grown by up to 20% since the GST reforms.” At a launch event in Mumbai on Tuesday, January 13, 2026, Shailesh Chandra, chief executive officer of Tata Motors PV, told PTI, “Even December was very strong.” “I’m hoping January will be much better. As a result, these growth rates have been sustained in double digits for the past four to five months.
“I feel very optimistic that the industry has the ability to grow in double digits…about 10%…plus-minus 2%… even if it stabilizes a little going forward.”
The 2026 Tata Punch sub-compact SUV was introduced by Tata Motors PV on Tuesday, with a starting price of ₹5.59 lakh. In 2026, that vehicle, the recently introduced Sierra compact SUV, and the petrol versions of the Harrier and Safari are anticipated to increase sales for the Mumbai-based automaker.
“As far as Tata Motors is concerned, we have a busy year ahead of us in terms of product launches. Chandra stated, “I think we will be doing industry-beating growth.” We were ranked No. 2 in VAHAN after ranking No. 2 in Q3 of the current fiscal year. Thus, we’ve done well in 2025.
GST 2.0 and SUV-fication of India’s car market
On 22 September, the government reduced GST rates on soaps to small cars and SUVs in the biggest indirect tax reforms since Goods and Services Tax first came into effect on 1 July 2017.
- Small cars (<4 m length, <1,200 cc engine) attract 18% GST vs 28% earlier.
- SUVs (>4 m length, >1,200 cc engine) attract 40% GST vs 28% earlier. Since the GST compensation cess has been done away with, the overall tax has reduced.
- Electric cars attract 5% GST.
The move spurred sales of cars of all shapes and sizes, but the outsized demand for oversized cars has outpaced hatchbacks—66% of all cars sold in India are now SUVs.
Against that backdrop, Tata Motors now has a well-defined spread on offer:
- Base: Tiago, Altroz and Punch
- Mid: Nexon, Curvv and Sierra
- Top: Harrier and Safari
According to Chandra, “all three cylinders in the SUV segment are doing well.” “This product (new Punch) will undoubtedly increase our sales and increase the share of the sub-compact SUV market.”
Sub-compact SUV taxes were lowered by 10 percentage points as a result of the GST rationalization, which increased sales in a stagnant market.
As a result, Chandra stated, “growth has tremendously returned in the segment, to the extent of nearly 70%–80% in Punch sales.” “This segment and the entire entry segment were declining more than the average decline of the industry prior to the GST (rate cut).”
Tata Punch vs Skoda Kylaq vs Hyundai Exter
The sub-compact SUV segment, where the Punch competes with the likes of Hyundai Exter and Skoda Kylaq, is currently witnessing cumulative monthly sales of about 40,000 units.
“This segment has the potential to continue to expand… At one stage, it would have been 20,000 (units per month), which went to 30,000 and now 40,000,” Chandra said. “I clearly see that—on one hand—the industry will grow faster than what we had been seeing last year.”Chandra expressed optimism that the new Punch “will be a winner in the market” due to its improved value proposition, freshness, contemporariness, and additional powertrain options.
FAQs: Tata Motors PV 2026 Growth, Punch & Sierra Launch
1. What is Tata Motors PV’s growth outlook for 2026?
Tata Motors Passenger Vehicles (PV) is optimistic about outperforming the Indian auto industry, which is expected to grow around 10% in 2026. The company aims for industry-beating growth with new launches and strong SUV sales.
2. How did the Indian auto industry perform in 2025?
The industry experienced a decline in the first eight months of 2025, but recovered strongly, posting up to 20% growth after GST reforms. December 2025 was particularly strong, and Tata Motors PV expects January 2026 to continue the momentum.
3. Which Tata models are expected to drive growth in 2026?
The key models driving growth include:
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Tata Punch (sub-compact SUV) – launched at ₹5.59 lakh
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Tata Sierra (compact SUV)
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Petrol versions of Harrier and Safari
4. What is the pricing of the 2026 Tata Punch?
The new Tata Punch starts at ₹5.59 lakh in India.
5. How has GST 2.0 affected car sales in India?
The GST rationalization in September 2025 reduced taxes:
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Small cars (<4 m, <1,200 cc) from 28% → 18%
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SUVs (>4 m, >1,200 cc) from 28% → 40% (compared to previous 28% + cess)
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Electric cars: 5% GST
This tax cut has boosted sales across segments, especially SUVs, which now account for 66% of cars sold in India.
6. How is Tata Motors positioned in the market segments?
Tata Motors PV has a well-defined portfolio:
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Base: Tiago, Altroz, Punch
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Mid: Nexon, Curvv, Sierra
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Top: Harrier, Safari
7. How has the Tata Punch performed since launch?
Sales of the Punch have increased 70–80%, benefiting from both the GST cut and its appeal as a fresh, contemporary sub-compact SUV.
8. How does Tata Punch compare with competitors?
The Punch competes with models like the Hyundai Exter and Skoda Kylac, in a sub-compact SUV segment that currently sees ~40,000 units sold per month, up from 20,000 units in previous years.
9. What makes the new Tata Punch appealing?
The Punch offers:
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Improved value proposition
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Fresh design and contemporary features
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Multiple powertrain options
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Strong presence in a fast-growing sub-compact SUV segment
10. What are Tata Motors PV’s market share achievements?
Tata Motors PV ranked No. 2 in VAHAN in Q3 of the current fiscal year, maintaining strong performance after 2025.
11. What is Tata Motors PV’s strategy for SUVs in 2026?
The company is focused on the “SUV-fication” trend, leveraging strong sub-compact, compact, and full-size SUVs to drive growth and capture higher market share in India’s growing SUV segment.
