Tata Motors Plans Another Car Price Hike Amid Rising Raw Material Costs

Tata Motors Passenger Vehicles is considering another increase in car prices in the fourth quarter of FY2027 as rising raw material costs put pressure on its profit margins. Managing Director and CEO Shailesh Chandra said the company may opt for a slightly higher price revision than in previous rounds. Rising prices of steel, rubber and copper have increased production costs. The company absorbed nearly 60% of the additional cost burden during the first half of the financial year, despite taking measures to manage the impact. As a result, its EBITDA margin in the domestic passenger vehicle business declined to 4%.

The company expects cost pressures to continue in the third quarter but anticipates an improvement in profitability in the fourth quarter through cost-control measures and price revisions. However, it is cautious about passing the entire burden on to customers, as raw material prices could ease in the future. A final decision will be taken after assessing which cost increases are likely to be permanent. Meanwhile, demand remains stable. Tata Motors sold more than two lakh vehicles in Q2 FY2027, securing a 14.3% share of the domestic market. With dealer inventory remaining below 30 days, the company does not expect to offer heavy discounts in the near future, Chandra said.