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Mint
5 days ago
- Automotive
- Mint
Tata Motors' headcount, senior pay squeezed as sales dip in FY25
New Delhi: For the first time in five years, automotive manufacturer Tata Motors saw its workforce shrink in a fiscal year, when its employee base fell 3% in FY25 compared to the previous fiscal. Alongside, the fiscal also saw median salary hikes for its senior-most executives at just 3% compared to 15% in FY24, according to data from its annual report of FY2024-25. The twin developments happened in the backdrop of falling demand for its cars, trucks and buses in the fiscal. The total employee count of the country's third-largest automaker, excluding employees of its UK-based subsidiary Jaguar Land Rover, fell from 60,113 employees, including workers, in FY24 to 58,442 employees in FY25, the first such fall since 2019-20. In FY24, Tata Motors had increased its workforce by 6%. Much of the fall was due to the decline of non-managerial personnel to 45,486 during the last fiscal from 47,495 in the year ago period. A Tata Motors spokesperson clarified that the fall in employee count was not reflective of the business environment. Also read | How Tata Motors plans to win back the market with its hatchbacks 'The change in non-managerial personnel is a year-end position and not representative of the underlying business fundamentals," the spokesperson said, responding to Mint's queries. Meanwhile, one of the exceptions to the 3% median salary hike for senior employees was Girish Wagh, the company's executive director, who received a 22% increase in his salary to ₹8.53 crore. To be sure, the median salary hike for all employees did see a rise–from 6.1% in FY24 to 6.5% in FY25. 'The salary increases for directors and KMPs reflect the KPI (key performance indicator) delivery and a high base effect," a company spokesperson said. The company recorded muted 1.3% growth in consolidated revenue to ₹4.39 trillion in FY25, as sales fell globally. Net profit for the year fell 11% to ₹28,100 crore, from ₹31,800 crore in FY24. The passenger vehicle division of Tata Motors recorded a 7.5% decline in revenue to ₹48,445 crore in FY25 amid a 3% fall in total sales to 556,263 cars. Similarly, the commercial vehicle segment also recorded a 4.7% fall in revenue to ₹75,053 crore as sales fell 5% to 358,570 vehicles. Broader industry trend These developments at Tata Motors raise questions about the health of the wider auto industry. The overall market for passenger vehicles (PVs–including cars and SUVs) grew just 2% in the previous financial year to 4.3 million units. In the current fiscal, industry expectations peg growth at 1-2%. 'Hiring in the auto sector is seeing some slowdown, mostly because of lower sales of regular cars and two-wheelers, although commercial vehicles are steady and electric vehicles continue to grow," said Neeti Sharma, chief executive at TeamLease Digital. 'Jobs in traditional areas like manufacturing, sales, and general IT are fewer." As per data from Federation of Automobile Dealers Associations, commercial vehicle sales in FY25 was nearly flat at 1 million units while electric passenger vehicle sales grew 17% to 107,645 units in the same period. Also read | From Tiago to Curvv: offers major price cuts and perks across EV range Tata Motors was not alone in recording a decline in sales. India's No.2 automaker Hyundai Motor India Ltd also recorded a 3% decline in sales, with domestic sales falling to 599,000 from 614,000 in FY24. To be sure, market leader Maruti Suzuki India Ltd saw domestic market growth at 3% in FY25 to 1.9 million units, compared to 9% growth in FY24. 'Unless something changes, the domestic market will remain muted," said R.C. Bhargava, chairman of Maruti Suzuki India Ltd, post declaration of the firm's Q4 results on 25 April. 'In this current year, sales of small cars have declined by about 9%. If there is such a decline in the sales of cars that can be afforded by 88% of people earning, how can we expect growth?" Natarajan Chandrasekaran, chairman of Tata Motors' board, said in a message to shareholders: 'The Indian passenger vehicle industry entered a phase of consolidation following years of high growth, with steady demand tempered by macroeconomic factors." Can Tata Motors' numbers recover? Analysts remain divided on whether Tata Motors' growth in revenue and profits will bounce back. 'Refresh launches of Altroz and Tiago (launched in Q4) will help Tata Motors regain lost market share in hatches, while the launch of Sierra ICE and EV and Harrier EV may strengthen UV share," Jay Kale of Elara Capital wrote in a 14 May note. However, a key factor to watch for will be whether the demand for its overall products picks up in a slow car market. 'In India, both CV and PV businesses are seeing moderation in demand. Given these headwinds, we have lowered our earnings estimates for Tata Motors by 12%/5% over FY26/FY27," Aniket Mhatre of Motilal Oswal Financial Services wrote in a 14 May note. In 2025, Tata Motors share price has fallen by 2.7% as against a 2.63% rise in Nifty Auto. Also read | Tata Motors' windscreen is hazy amid the fog of tariffs
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Business Standard
5 days ago
- Automotive
- Business Standard
Ageing truck fleet rekindle commercial vehicle makers' revival hopes
After several sluggish years, India's truck market remains in a challenging phase, with the average fleet age now at a historic high of 9 – 9.5 years — up from the earlier 7–7.5 years. This rise reflects a broader concern — weakening cyclical demand that has delayed fleet renewal across the industry. However, a turnaround may be on the horizon. Industry experts predict mid-single-digit growth in the Medium and Heavy Commercial Vehicle (MHCV) segment in FY26, driven by an expected uptick in replacement demand. Tempering optimism, truck owners, however, strike a note of caution. The transition from BS IV to BS VI standards led to a 50 per cent increase in truck EMIs, along with additional operational expenses and a persistent shortage of skilled drivers in the sector. 'We anticipate growth on the trucks this year, especially after two softer years. The fleet age is at its peak now, which should spur replacements,' said KM Balaji, CFO of Ashok Leyland. He pointed to a robust rebound in the bus segment, where sales rose from 53,000 to 64,000 units in just a year, and projected a similar mid-single-digit growth trajectory for MHCVs. Tata Motors echoes this sentiment. 'We expect single-digit growth across segments, with HCVs and buses slightly outperforming ILMCV and SCV pickups,' said Girish Wagh, executive director and head of commercial vehicles, during the company's Q4 earnings call. Despite the cautious optimism, truck owners remain wary. The transition from BS IV to BS VI norms has substantially raised costs —monthly truck EMIs have surged by 50 per cent, alongside additional operational and maintenance expenses. 'We now pay ₹90,000 in EMI for a 12-wheel truck, up from ₹60,000 before BS VI,' said K Arul, secretary of the Namakkal Taluk Lorry Owners Association. Namakkal is a key logistics hub in South India. The BS VI upgrade requires sophisticated emission control systems, including Diesel Particulate Filters and Selective Catalytic Reduction units — adding to both purchase and running costs. Meanwhile, a shortage of skilled drivers, despite salaries averaging ₹ 40,000 per month, continues to weigh on fleet operations. Another factor holding back demand is the post-Covid slowdown in freight movement. 'Freight hasn't recovered fully, and without that, there's no incentive to buy expensive new trucks,' Arul explained. The policy shifts may offer a glimmer of hope. The Vehicle Scrappage Policy, in effect since April 2022, mandates emissions and fitness tests for commercial vehicles over 15 years old. Non-compliant vehicles face scrapping, nudging operators toward new purchases. 'The average fleet age rose to 9.5 years due to extended use of vehicles by second owners who couldn't afford replacements,' noted Ravi Bhatia, President of JATO Dynamics. 'But this trend may reverse as policy and market pressures drive renewals.' Yet, fleet owners argue that incentives remain insufficient. 'Scrapping only gives us ₹3–4 lakh, while a new truck costs around ₹50 lakh. How can we bridge that gap?' Arul added.
