Tata Motors To Turn Its Passenger Cars And Electric Vehicles Businesses Into One Subsidiary

While the automobile industry is essentially under lockdown due to the coronavirus outbreak, that hasn’t stopped Tata Motors Limited from taking major decisions. TML’s board of directors has approved a plan to create a new subsidiary for its passenger vehicles and EV (electric vehicles) businesses. 

The new subsidiary will be created by transferring relevant assets, IPs and employees to make the new entity fully functional on a standalone basis through a slump sale, the manufacturer said in a regulatory filing. However, certain services and functions will be retained at Tata Motors Limited to deliver cost efficiencies of the entire group.

 

This transfer will be implemented via a scheme of arrangements over the coming weeks, the manufacturer added. Tata’s reasoning for this decision is to help provide a differentiated focus for its passenger and commercial vehicle business to maximise their potential. Tata Motors expects the transfer process to be completed by around 2021.

In addition to this, Shailesh Chandra, President of Tata’s EV and Corporate Strategy, has been appointed as President of the passenger vehicle business as well. He will be taking this role over from Mayank Pareek with effect from April 1, 2020. In the meantime, the two will be working on the transition, with Mayank Pareek being relieved from Tata Motors by the end of 2021.