Tata Motors has, in principle, approved a plan to subsidiarise its passenger vehicle (PV) business, including electric vehicles, by transferring relevant assets, IPs and employees directly relatable to the PV business for it to be fully functional on a standalone basis through a slump sale. However, certain shared services and central functions will be retained at Tata Motors to deliver cost efficiencies for the entire group. The proposed transfer will be implemented through a scheme of arrangement, which will be tabled for approval to the TML Board over the next few weeks.
In a statement issued today, the company said, "The passenger vehicle business landscape is seeing rapid transformation in the form of tightening emission norms, push towards electrification, enhanced disruptions from autonomous and connected technologies. Additionally, India continues to remain an attractive market for global OEMs, while the aspiration levels of the Indian consumer continue to rise requiring stepped up investments in contemporary products in a competitive market.
Over the last few years, TML's PV business has implemented a strong turnaround and has earned its right to grow by launching a slew of successful products like the Tiago, Tigor, Nexon, Hexa, Harrier and, most recently, the Altroz and Nexon EV. A fully refreshed BS6-ready product portfolio based on the Impact 2.0 design philosophy, consistently improving NPS scores, improved retail market shares and an exciting entry into the EV space coupled with improved profitability makes the business ready to realise its potential."
"However, the recent outbreak of COVID-19 virus increases the challenges faced by the business. In this situation, our first priority is to secure the health and safety of our people while continuing to serve our customers and securing the viability of our ecosystem. Additionally, in sync with our strategy to 'Win Sustainably', we will take decisive steps to strengthen our business over the long-term. A move towards subsidiarisation of the PV business is the first step in securing mutually beneficial strategic alliances that provide access to products, architectures, powertrains, new-age technologies and capital."
Shailesh Chandra appointed President of PV business, to take over from Mayank Pareek
Along with this move, Tata Motors has announced the appointment of Shailesh Chandra, currently President EV and Corporate Strategy, as President - PV Business including EVs, with effect from April 1, 2020.
Chandra will be taking charge of the PV business from Mayank Pareek. They will together work on the transition over the next few weeks. Pareek will be superannuating from Tata Motors at the end of February 2021.