NEW DELHI: Tata Motors is absorbing a substantial share of rising input costs as price increases and savings fail to fully offset the pressure, even as it expands its compact sedan offering for family buyers.Commodity inflation over past five-to-six months had created uncertainty over costs and margins, said Shailesh Chandra, managing director, Tata Motors Passenger Vehicles. “So, there is a major part which is being not only absorbed but also coming from cost reduction side which we are accelerating.”Chandra put the additional commodity-cost impact at around 3%, with a variation of 0.5 percentage points. The company is combining price increases with faster cost reduction to cushion the impact. He also flagged emerging pressure on electronic components. “Semiconductors and chips will come under pressure because of another mega trend on the AI side,” he said, while cautioning that it was “not something to be alerted as a big issue at this stage”.Alongside these pressures, Tata is separating its compact sedan offerings for personal and fleet customers. The new Aeris will target families, while Express will serve taxi operators, moving away from Tigor’s shared-brand approach.Compact sedans account for about 3.5 lakh units annually or 80-85% of India’s sedan market, Chandra said. Volumes grew roughly 25-26% over the past year, with personal buyers contributing 65% of demand.Tata sees smaller cities and rural markets as important sources of demand, with sedans retaining aspirational appeal. Aeris will offer petrol and CNG options and seek to attract premium-hatchback buyers. The company is withholding an electric version to avoid overlap with its existing EV portfolio. Meanwhile, demand for Tata’s electric vehicles is running ahead of supplies. “The inability to supply is holding that penetration. So it’s more supply side constraint,” Chandra said.