For Tata Group chairperson N. Chandrasekaran, Tata Motors Ltd has been one of the conglomerate’s standout performers in recent years—rising to third spot in a market dominated by Maruti Suzuki India Ltd and Hyundai Motor India Ltd.In Chandrasekaran’s letter to shareholders as part of Tata Group’s holding company Tata Sons’ latest annual report, the auto business found a special mention.“Let me pause and mention one example that exemplifies the best of what we can do: Tata Motors,” Chandrasekaran said in his letter.“With barely 5% share in passenger vehicles in 2017, it seemed an implausible idea that Tata Motors could launch India’s first electric vehicle in under one year from design to production, that its market position could rise from 6th to top-3 in the Indian market, that it could transform from a debt of INR 62,000 Cr to net cash positive status,” he wrote.However, some wrinkles are appearing in the Tata Group’s auto business, which may worry Chandrasekaran, who heads the board of the Mumbai-based Tata Motors.After nearly four years of rapid growth post the covid-19 pandemic, growth momentum for Tata Group’s two flagship auto businesses—the publicly listed Tata Motors and the privately held Tata AutoComp Systems Ltd—is faltering.Tata Motors is in the business of making and selling automobiles in the domestic and international markets, while Tata AutoComp manufactures auto components.The two businesses saw their profit drop in financial year 2025 amid rising competition and declining growth in both domestic and international auto markets. While Tata Motors saw its consolidated FY25 net profit fall by 12% to ₹28,149 crore for the first time in four years, Tata AutoComp’s net profit nearly halved to ₹735 crore, Tata Sons’ latest annual report revealed.Tata Motors consolidated revenue rose marginally year-on-year in FY25 to ₹4.39 trillion. However, for the first time since the financial year 2020, Tata AutoComp’s revenue declined to ₹13,095 crore in FY25 from ₹13,722 crore in the year before.Also Read | Tata Motors plans a premium push as competition intensifies in EV spaceWith both automobile and auto parts businesses facing headwinds owing to US tariff threats and slowing growth, analyst projections for this year are not rosy for the conglomerate’s auto business.Analysts highlighted the slowdown in the performance of Jaguar Land Rover which will impact Tata Motors as nearly three-fourth of its consolidated revenue and profit come from the UK-based company.“We are building in a subdued 3% revenue CAGR over FY25–27E owing to volume decrease at JLR (3% CAGR) and muted growth in the India CV (2% CAGR) division,” analysts at Nuvama Institutional Equities wrote in a 16 June Note on the performance of Tata Motors.“In JLR, discontinuance of ‘Jaguar’ ICE models, loss of market share in the China region and imposition of tariffs in the US shall lead to volume contraction ahead. 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In FY25, Tata Motors and Tata AutoComp encountered some difficulties as obstacles increased.
