*Auto Sales to Soften in 2025–26; Tata Motors to Refocus on Hatchbacks* India’s automobile industry is expected to witness a moderation in sales growth in the fiscal year 2025–26, after two years of strong recovery-driven momentum. According to industry forecasts, high base effects, rising ownership costs, and tightening financing conditions may lead to slower demand, especially in the entry- and mid-level passenger vehicle segments. Amid this anticipated slowdown, Tata Motors has announced plans to renew its focus on the hatchback segment, signaling a strategic shift to reinforce its presence in the affordable car market. The company aims to revitalize its compact offerings by enhancing fuel efficiency, safety features, and digital connectivity—key drivers for price-sensitive buyers. Senior executives at Tata Motors stated that while SUVs and EVs have been growth engines in recent years, the hatchback segment remains vital for volume and first-time buyers, particularly in Tier II and Tier III cities. The company is expected to launch new variants and refreshed models of the Tiago and Altroz, with additional emphasis on design and value-for-money features. On the industry front, the slowdown in auto sales is being attributed to a combination of factors: plateauing pent-up demand, increasing vehicle loan EMIs due to high interest rates, and rising input costs pushing up vehicle prices. Analysts also note that replacement demand may remain weak in rural markets, which have been affected by erratic monsoons and lower discretionary spending. Two-wheeler and entry-level car segments are expected to face the sharpest impact, while premium vehicles and electric cars may still see stable interest due to aspirational buyers and government incentives. Despite the expected softness, automakers remain cautiously optimistic, focusing on portfolio realignment, cost efficiency, and digital retail channels to maintain competitiveness. For Tata Motors, the renewed push into hatchbacks is seen as a balancing move—diversifying away from its SUV-heavy strategy while leveraging brand equity among budget-conscious consumers. The year 2025–26 could prove to be a period of consolidation for the Indian auto sector, with manufacturers adopting a sharper focus on affordability, fuel economy, and customer-centric innovations to ride out the slowdown.