Having initially manufactured Tata Nano and later hatchbacks, the 14-year-old Tata Motors plant at Sanand in Gujarat will soon graduate towards manufacturing “bigger” passenger car variants.

“The plant was constructed to deliver high-quality small cars in a very frugal and cost-effective manner... Going forward, we look forward to enabling this plant to make bigger cars. This is because the size of cars (being sold in the Indian market) is getting bigger. There will be certain adaptations required in certain shops within the factory to enable it to accommodate bigger cars. It requires plant shutdowns and investments,” said Shailesh Chandra, Managing Director of Tata Motors Passenger Vehicle and Tata Passenger Electric Mobility. The official refused to elaborate on the investments needed and if the bigger car variants to be manufactured at the Sanand-1 plant in the future would be a sedan or an SUV.

Market shift

Pointing out how there has been a shift in customer preference for larger cars, Chandra said, “The median selling price of cars has gone up to ₹11 lakh compared with ₹3.5-4 lakh 10 years ago. The market has been shifting... In the last calendar year, there has been a steep decline in hatchback sales in the industry. It is only Tata Motors which has grown in this segment because of its multi-powertrain strategy: EV, Petrol, and CNG. This has protected the growth for this segment.” 

The official said SUVs are the only segment that has been growing, while players have been exiting the hatchback segment. “When we launched Nexon in 2017, 30 per cent of the buyers were first-time buyers. This means people were still buying hatchbacks as their first car. Today, 60 per cent of our Nexon buyers are first-time buyers,” Chandra said, talking about changing consumer preferences.

The Sanand-1 plant, which used to produce Tata Nano and later shifted to production of Tata Tiago and Tigor models, currently contributes 20 per cent of the passenger car sales of Tata Motors. Of the total cars the plant churns out annually, 20 percent are CNG, 40 per cent are petrol, and the remaining 40 per cent are electric variants of both of these car models. The plant currently has an installed capacity of 1.9 lakh cars and has a 70 per cent capacity utilisation. “The capacity can be further expanded to 3 lakh cars per annum,” said the official, adding that Tata Motors has already invested around ₹5,500 crore in the plant.

One millionth car

“The Sanand-1 factory set up in January 2010 rolled out the one millionth car on Friday. This has been a big milestone because we were in very challenging times when we started this factory. It was set up in a record time of 14 months,” Chandra said, adding how the plant, which came up on 1,100 acres and included a 360-acre vendor park in close vicinity, helped create an automobile cluster in Gujarat.

Tata employs about 6,000 workers at the Sanand-1 plant, which is the first plant of the company in Gujarat. The company later acquired a portion of the Ford Motors plant, which has now been rechristened the Sanand-2 plant.

“It is in Sanand where we first started our electric vehicle production. It is also the first factory where we started a comprehensive set-up for factory-fitted CNG cars. This plant has adapted a lot over a period of time,” he added. Currently, 50 percent of the electricity consumed in the plant comes from renewable sources. In the next three years, Tata Motors plans to source 100 per cent of the energy requirements at Sanand-1 through renewable sources. 

New EV launches

Tata Motors is also planning to introduce at least five electric vehicle (EV) variants by the calendar year 2025. “This year we started with the launch of Punch EV. During the middle of the year, the Curvv EV will come. Thereafter, we are trying to bring in a Harrier EV by the end of the year. In the next calendar year, we are trying to bring in the Sierra EV, the Avinya EV, and the Altroz EV. So at least five more cars will come,” said Chandra.

The official explained how Tata Motors was focussed on decreasing the prices of electric vehicles while at the same time trying to increase the driving range of the vehicles to meet customer expectations. “You would have seen that ICE car prices don’t come down. They only increase. It is only EV prices that have come down. As market leaders, we are passing on the benefits every year to the customer. As the battery prices come down, we take a lower-range product and bring down the prices. This will make it accessible to more people. But, as there is driving range anxiety among customers, I have to increase the range of the EVs (which leads to an increase in prices in higher variants),” Chandra said.

“The new cars that are going to be launched will have big battery packs. These will be slightly expensive cars that will give the customer the full comfort of driving range,” he added. The Tata Punch EV, launched in January 2024, has a range of 315-421 km.