In a bid to strengthen its passenger vehicle business, India's largest auto maker, Tata Motors, has decided to subsidiarize it and keep it as a separate entity. The passenger vehicle subsidiary will also now include the company's electric vehicle business which has has seen a lot of activity recently, with the launch of the new Nexon EV. Of course the company plans to add some new cars to its EV portfolio and we already know that the Altroz EV is next in line.
According a company release, "Tata Motors' Limited board (TML) has in-principle approved to subsidiarize TML's PV business (including EV) 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".
The Harrier was the latest car to be launched by Tata Motors
However, the company says certain shared services and central functions will be retained at Tata Motors deliver cost efficiencies for the entire group. The proposed transfer shall be implemented through a scheme of arrangement, which will be tabled for approval to the TML Board over the next few weeks. Implementation of the scheme will be subject to regulatory and statutory approvals as applicable, including approval of shareholders and creditors. Tata Motors expects the transfer process to be completed in the next one year.
Tata Motor's current passenger Vehicle line-up includes everything from a small hatchback Tiago to their most recent launch, the Harrier. On the electric vehicle front the Nexon EV is leading the charge with the Altroz EV coming soon. The company says subsidiarization 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.
Change in Guard
Shailesh Chandra will take over the reigns as the President of the Passenger Vehicle business
Tata Motors also announced that the current President of passenger vehicle business, Mayank Pareek would be reaching superannuation in Tata Motors at the end of February 2021. However, Shailesh Chandra who currently heads the EV business and Corporate Strategy will replace him as President, PV business including EV with effect from April 1, 2020. In a statement the company thanked Mayank for his contribution in getting the passenger car business back on track and added that over the next few months both Shailesh and Mayank will work on a smooth transition of affairs in the Tata Motor's passenger vehicles business.