Tata Motors warns of uncertainty over commodity costs as it braces for another margin hit

Tata Motors Passenger Vehicles

25/09/2026 11:37

By Aditi Shah
NEW DELHI, Sept 25 (Reuters) - Indian automaker Tata Motors TAMO.NS warned on Friday of prospects for a price hike as it braces for another hit to profit margins from a "significant" increase in commodity costs, though its bigger concern is how long the uncertainty will last.
The Iran war has pushed up costs of energy, freight and raw materials, forcing companies to absorb some of the increases or pass them on to customers, who are turning to alternatives such as electric vehicles to save money.
Commodity inflation is expected to have a further margin impact of 3% of revenue at Tata's passenger vehicles division in the July to September quarter, Managing Director Shailesh Chandra said, following a hit of 4% in the prior period.  
"The greater worry is the uncertainty. Whether this is all that was supposed to happen or whether a part of the commodity side will keep being uncertain and be under pressure," he told reporters ahead of a new car launch.
"It is not possible to pass on these increases to the market at the speed at which costs have increased ... which creates immense margin pressure," he said, adding that Tata had hiked car prices by less than 5% but an increase was in the offing.
He gave no details of the likely timing of the hike.

HIGHER FUEL PRICES FROM IRAN WAR SPUR EV DEMAND
The higher fuel prices stemming from the Iran war have also boosted sales of electric vehicles and cars using compressed natural gas as buyers move away from expensive gasoline to save on running costs. 
India's biggest EV maker, Tata has doubled its electric car production capacity to more than 16,000 units a month and continues to expand to meet growing demand, Chandra said.
Electric models account for 21% of Tata's total car sales in India, up from 14% last year and the share of petrol and diesel has fallen to 52% from 59% over the same period.
The Aeris compact sedan Tata launched on Friday is its most competitive offering for buyers, with prices as low as 529,000 rupees ($5,500). It offers two fuel options - gasoline or cheaper compressed natural gas (CNG).
($1=95.8300 rupees)

 (Reporting by Aditi Shah; Editing by Clarence Fernandez)
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