Tata Motors eyes strong growth as India clears Geely investment boost

The Indian automotive industry experienced a week marked by aggressive growth plans, regulatory changes, and significant investments. Tata Motors announced detailed strategies for expanding both its passenger and commercial vehicle businesses. Bajaj Auto set its priorities for FY27, while India moved closer to approving a $370 million Geely-backed powertrain investment. These developments highlight the sector's focus on growth, technology, and evolving international partnerships.

Key Highlights

• Tata Motors targets over 1.2 million annual passenger vehicle sales by FY31
• India set to approve $370 million Geely-backed hybrid powertrain investment
• Draft rules propose mandatory cybersecurity for connected and autonomous vehicles
• Bajaj Auto focuses on 125cc-plus motorcycles and electric vehicle expansion
• Volkswagen restructuring could impact up to 100,000 jobs in Germany

Tata Motors Outlines Expansion Plans

Tata Motors revealed plans to more than double its annual passenger vehicle sales to over 1.2 million units by FY31. The company aims to increase its domestic market share to 18-20% and expand its portfolio from nine to 15 nameplates. Over the next five years, Tata Motors will introduce more than 20 product interventions, including six all-new nameplates, facelifts, derivatives, and broader powertrain options.

Electric vehicles remain central to Tata's strategy. Models such as the Sierra.ev, Safari.ev, and Avinya will lead the next phase of growth. Tata Motors expects electric and CNG vehicles to account for about 45% of the Indian passenger vehicle market by FY31. The company targets consolidated revenue exceeding ₹6 lakh crore, a 10% EBIT margin, and profit before tax and exceptional items of over ₹50,000 crore by the end of this period.

For its commercial vehicle business, Tata Motors is targeting a 40% domestic market share by FY28. The company aims for double-digit EBITDA margins and a 30-35% return on capital employed after the proposed IVECO acquisition. Plans include launching four new small commercial vehicles and five pickups in FY27, as well as evaluating the introduction of IVECO mining tippers and daily minibuses in India. Tata Motors will also begin trials of a 2% isobutanol-diesel blend in the second quarter of FY27.

Major Investments and Regulatory Changes

India is expected to approve a $370 million investment from Horse Powertrain Ltd., a hybrid-engine joint venture backed by China's Geely and France's Renault. This investment would support the production of advanced hybrid powertrains and engines in India, ranking among the largest Chinese-linked manufacturing investments approved in recent years.

The Ministry of Road Transport and Highways published draft rules to make cybersecurity and software-update management mandatory for certain connected and autonomous vehicles. The draft proposes adding Rules 125-T and 125-U to the Central Motor Vehicles Rules, 1989. The public can comment on the draft for 30 days before finalization.

The Heavy Industries Ministry extended the global tender deadline for its rare-earth magnet manufacturing program. This move aims to reduce India's reliance on imported critical materials for the automotive sector.

Other Key Industry Developments

Bajaj Auto will focus on strengthening its position in the domestic 125cc-plus motorcycle segment, expanding Chetak, KTM, and Triumph brands, and increasing exports. The company will also boost capacity for electric vehicles and premium motorcycles, develop alternative materials, and support KTM's financial recovery.

Renault India began exports of the new Duster, while Tata Motors secured orders for more than 3,400 electric commercial vehicles. Bajaj Auto signed an agreement with Delhivery for last-mile fleet electrification. TVS Motor started production of Norton’s Atlas platform at its Hosur facility.

Globally, Volkswagen considered restructuring that could affect up to 100,000 jobs and four German plants. Bosch appointed Christian Fischer as its next chief executive, and suppliers like ZF and Valeo announced new strategies focused on profitability and technology.