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Tata Motors Refutes Reports About 49 Per Cent Divestment Of Its Passenger Vehicle Business

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Recent media reports suggest that Tata Motors is transferring its passenger vehicle business to a wholly-owned subsidiary and plans to sell up to 49 per cent stake in the PV business to a foreign company. However, Tata has told carandbike that the reports are baseless and without any merit.

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Tata Motors has said that the media reports are "factually incorrect, highly speculative and misleading."


  • Reports suggested that Tata plans to sell 49% stake in the PV business
  • Tata Motors is saying the reports are "baseless and without any merit"
  • In March 2020, Tata merged its passenger cars & EV business

Refuting recent media reports about the company's plan to sell up to 49 per cent stake of its passenger vehicle business to a foreign company, Tata Motors called it "baseless and without any merit". The Times of India recently reported that Tata Motors is planning to transfer its PV business to a wholly-owned subsidiary for ₹ 9,417 crore, and is in talks with multiple automakers, both European and East Asian, to sell up to 49 per cent stake in the subsidiary company. When we reached out to the carmaker, Tata Motors said that the report was "factually incorrect, highly speculative and misleading," and the carmaker will be taking it up with the concerned parties.

Also Read: Tata Motors Merges Electric And Passenger Car Entities

Reiterating the fact that the company has made no such comments or decisions regarding the divestment of its passenger car business, a Tata Motors spokesperson said, "As you are aware, in March 2020, TML had announced the intent to subsidiaries its PV business as the first step towards securing mutually beneficial strategic alliances that provide access to products, architectures, powertrains, new-age technologies and capital. Accordingly, TML has conversations with various OEMs for identifying potential partnership opportunities."


Tata has merged its passenger vehicle and electric vehicle business, plans to subsidiaries it to strengthen the PV business

In March 2020, Tata Motors merged its passenger vehicle and electric vehicle business, and said it will strengthen the PV business. The company said that it will be 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, the company had also said that the proposed transfer shall be implemented through a scheme of the arrangement, and it 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.

Also Read: Tata Motors Records Loss In Q1 FY2021 As Coronavirus Crisis Dents Sales

The said report also suggested that Tata Motors is in talks with Chinese players like Geely, Changan and Chery but the deteriorating relations between India and China and impacted the deal. We too would believe that, in the event of bringing in a new partner for its subsidiary, Tata might not go with a Chinese brand, especially given the company's 'Vocal For Local' campaign to promote its Made-In-India cars, which is resounded well with consumers emotions under the current pandemic situation.

Also Read: Tata Motors' Global Wholesales Decline By 64% In Q1, FY2021


Tata Motors' EV business expanded with the introduction of the Nexon EV, and the company will soon also bring in the Tigor EV facelift and Altroz EV

Talking about Tata Motors' plan for the new subsidiary company, the spokesperson added, "TML is India's foremost homegrown auto company. Over the years our initiatives have and will continue to strengthen India and its auto sector. We shall share our plans once they are finalised. Until such time as a policy, we do not respond to market speculations."


Tata Motors had previously said that 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.

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