On Thursday, Tata Motors launched the new Tiago in a bid to boost the hatchback segment that has been under pressure due to small SUVs. Priced aggressively starting Rs 4.69 lakh for the petrol variant, Rs 5.79 lakh for CNG, and Rs 6.99 lakh for EV, the company believes it will attract first-time car buyers – even those who earlier considered only small SUVs such as the Punch.
Industry data for 2025 sales shows that SUVs/crossovers captured a dominant 55% market share with a volume of over 2.48 million units, and grew 8% over 2024. In contrast, the hatchback segment held a 22% share with a volume of 1.06 million units, showing a flat 0% growth over the previous year.
Despite this stagnation, Shailesh Chandra, the MD & CEO of Tata Motors, told this newspaper that hatchbacks remain the gateway to personal mobility for millions of Indian families. “For far too long, this segment received scarce attention from the industry, when it genuinely deserved far more,” Chandra said, adding that customers did not abandon hatchbacks by choice, but manufacturers slowed down hatchback updates compared to the rapid innovation seen in SUVs.
Disrupting Entry-Level Segment
“Aspiration should not be limited to just higher price points,” Chandra said. “Even entry-level cars can be made highly aspirational with the right feature set.” The company has made the new Tiago aspirational by introducing upscale design elements such as new colours like Varanasi Vibrance and Dehradun Dew, connected tail-lamps, a fabric dashboard, segment-first 360-degree surround-view camera system with a blind view monitor, 26.03-cm HD touchscreen infotainment system, and a dual smartphone deck with a wireless charger.
Chandra added that all cars must be safe, and the Tiago gets six airbags and ESP with traction control as standard across all variants. “Safety is paramount for small cars because they typically serve as the primary transport for an entire family, rather than a single individual,” he said.
De-risking Electric Adoption
To make EV ownership easier, Tata Motors has introduced Battery-as-a-Service (BaaS) financing scheme in the Tiago EV. Under BaaS, the introductory price of the Tiago EV drops to match the petrol counterpart at just Rs 4.69 lakh, with an additional battery EMI of Rs 2.6 per km.
“We have leveraged insights from the 75,000 customers who have adopted the Tiago EV since its 2022 debut, collectively logging over 2 billion km,” Chandra said. “We also have a new campaign – Mutual funds hi nahi, Tiago EV sahi hai – presenting a compelling mathematical case for buyers. The median Tiago EV user drives 1,500 km per month. Due to substantially lower operating costs, a customer can fully recover the Tiago EV’s purchase value within 4-5 years.”
Tata Motors has also launched the lifetime battery warranty (applicable on the 24-kWh pack for the first owner for up to 15 years). “In this category, this was the biggest missing piece,” Chandra said.
The Tiago is one of the few models in India that is available in three powertrains, and Chandra said that this strategic focus on alternative powertrains comes at a critical time. While entry-level buyers are highly sensitive to rising fuel prices – when even a Rs 10 hike in petrol can disrupt monthly household budgets – Chandra said that this pressure is triggering a shift in powertrain preferences rather than stopping car purchases.
“There’s a sharp jump that we see in EV bookings,” Chandra said, adding that in the last few days consumer interest for EVs was very high, and the company is now working aggressively to ramp up its supply chain. With the widest powertrain choices in the segment – including the CNG AMT with twin-cylinder technology that maximises boot space – the new Tiago, Chandra said, can reshape the expectations of the modern Indian car buyer.
