Tata Motors Passenger Vehicles is accelerating capacity expansion to meet rising demand for the recently launched Sierra and the refreshed Punch, as India’s passenger vehicle market touches record highs and supply constraints tighten, as per news reports.
Tata Motors is stepping up output through debottlenecking, partner capacities and selective brownfield expansions to address near-term capacity pressures. With most plants operating close to full utilisation, the company is prioritising process improvements and line optimisation to increase volumes without heavy capital expenditure.
“Most of our plants are operating at or near full capacity,” says Shailesh Chandra, managing director & CEO of Tata Motors Passenger Vehicles.
“To meet the strong and sustained demand we are seeing -- especially for SUVs and clean-fuel variants -- we are aggressively debottlenecking existing facilities, deploying partner capacities and planning brownfield expansions where feasible.”
Installed capacity currently stands at 9 lakh units annually, scalable to 10 lakh units. Sierra production will be ramped up progressively over the next three quarters.
Alongside capacity expansion, Tata’s growth strategy is being driven by product upgrades, particularly the Punch facelift.
Launched in petrol and CNG variants starting at ₹5.5 lakh, the refreshed Punch introduces the first-in-segment CNG automatic, strengthening its appeal in value-conscious markets.
“In calendar year 2024, Punch was the highest-selling car in the country. In 2025, volumes were impacted due to stress in the entry segment in the first eight months and also due to anticipation around the facelift, which led many customers to postpone purchases,” Chandra said.
The Punch continues to see strong traction beyond metros, with 47% of buyers from Tier-2 cities and 29% from Tier-3 towns. First-time buyers account for 67% of customers, while female buyers represent around 9%, highlighting its broad-based appeal.
Tata Motors’ passenger vehicle portfolio is increasingly tilted towards emission-friendly powertrains.
“At a portfolio level, emission-friendly powertrains now account for about 43% of our sales, with CNG at 28 per cent and EVs at roughly 15%. This is possibly the highest penetration for any passenger vehicle manufacturer in India,” Chandra says.
For the Punch, this share is already 45% and is expected to exceed 50% with the facelift and CNG automatic. The company has crossed cumulative EV sales of 2.5 lakh units, while the Tiago is nearing the 1-million sales milestone. Looking ahead, Tata expects both entry-level cars and SUVs to grow in 2026.
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As of January 14, 2026, at 9:39 AM, Tata Motors share price is trading at ₹351.55 per share, reflecting a surge of 0.51% from the previous closing price. Over the past month, the stock has surged by 1.27%.
Tata Motors is responding to a strengthening passenger vehicle market with focused capacity expansion and a clean-fuel led product strategy. By optimising existing plants, expanding selectively and refreshing key models like the Punch, the company aims to sustain growth across entry-level cars, SUVs and EVs while deepening customer retention.
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Published on: Jan 14, 2026, 12:20 PM IST
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