New Delhi, May 23 -- Tata Motors plans to increase the share of small hatchback cars in its overall portfolio to nearly a quarter, up from 19% currently, as it looks to reclaim ground in India's competitive auto market.

Unlike the country's largest carmaker, Maruti Suzuki India Ltd, which remains bearish about the future of small hatchbacks, Tata Motors believes premium offerings in the Rs.7-10 lakh range in the segment have potential.

Vivek Srivatsa, chief commercial officer at Mumbai-based Tata Motors, acknowledges that a lack of focus on upgrading products in the hatchback segment resulted in the company losing market share.

"Earlier, customers would start with entry-level hatchbacks and then move to premium offerings. But now, many...