A file photo of N. Chandrasekaran, Chairman, Tata Motors.
| Photo Credit: PAUL NORONHA

Tata Motors on Monday announced the demerger of its commercial and passenger vehicle segments into two separate listed entities to better capitalise on growth opportunities.

The commercial vehicles business and its related investments would be housed in one entity and its passenger vehicle business, including electric vehicles, Jaguar Land Rover (JLR) and its related investments, would be part of the second entity, the auto major said in a regulatory filing.

Tata Motors Chairman N. Chandrasekaran said that Tata Motors has scripted a strong turnaround in the last few years. “The three automotive business units are now operating independently and delivering consistent performance. This demerger will help them better capitalise on the opportunities provided by the market by enhancing their focus and agility,” he added.

The demerger would lead to a superior experience for customers, better growth prospects for employees and enhanced value for shareholders, he stated.

According to the proposal approved by the company board in a meeting on March 4, the demerger will be implemented through an NCLT scheme of arrangement and all shareholders of Tata Motors shall continue to have identical shareholding in both the listed entities.

Move to empower the respective businesses

Mr. Chandrasekaran said the scheme of arrangement for the demerger shall be placed before the company board for approval in the coming months and will be subject to all necessary shareholder, creditor and regulatory approvals which could take a further 12-15 months to complete.

“The demerger will have no adverse impact on employees, customers, and our business partners,” he stated.

The auto major stated that the demerger is a logical progression of the subsidiarisation of PV and EV businesses done earlier in 2022. The move shall further empower the respective businesses to pursue their respective strategies to deliver higher growths with greater agility while reinforcing accountability, the company said in the filing.

Furthermore, while there are limited synergies between commercial vehicles and passenger vehicle businesses, there are considerable synergies to be harnessed across PV, EV and JLR particularly in the areas of EVs, autonomous vehicles, and vehicle software which the demerger will help secure, the company stated.

Part of the $128 billion Tata Group, Tata Motors is a manufacturer of cars, utility vehicles, pick-ups, trucks and buses. As of March 31, 2023, Tata Motors’ operations included 88 consolidated subsidiaries, two joint operations, three joint ventures and numerous equity-accounted associates, including their subsidiaries, in respect of which the company exercises significant influence.

Tata Motors shares on Monday ended 0.12% down at ₹987.20 apiece on the BSE.

New Delhi:

Tata Motors-owned Jaguar Land Rover (JLR) aims to launch eight battery electric vehicles (BEVs) in India by 2030, according to a senior company executive.

The company currently sells one electric model — Jaguar I-Pace — in the country.

In an interaction with PTI, JLR Chief Commercial Officer Lennard Hoornik said the automaker will commence taking orders for the Range Rover BEV for the Indian market next year with deliveries expected to begin in 2025.

“We are planning to introduce at least 8 BEVs by the end of the decade in India,” he noted.

The British automaker, a wholly-owned subsidiary of Tata Motors since 2008, aims to become a net-zero carbon business globally by 2039.

Terming the Indian market a “big strategic priority” for the automaker, Hoornik noted that the country is in the right direction when it comes to transitioning into electric mobility.

He said subsidy push in the initial phase, setting up the right amount of charging infrastructure and having a great product (EV) were some of the essentials which would encourage the adoption of electric cars in the country.

Hoornik noted that governments around the world were trying to give electric cars a bit of a kickstart by offering subsidies.

“I think to kickstart that sort of transformation (to electric cars) I think it (subsidy) is very important,” he noted when asked if subsidies could also help in the growth of EV sales in India.

Hoornik said affordability is one critical factor in encouraging the adoption of electric cars.

“..Batteries are not cheap…So if there is anything that we can do to accelerate..once you get over a certain percentage (sales of EVs) it seems to just go right..beginning I think is quite important,” he stated.

Elaborating on the company’s overall roadmap in the country, Hoornik said the company aims to expand the Range Rover, Range Rover Sport, and Defender brands which were strong in the Indian market.

“We are now getting a number of new product releases within those families. There will be some special editions, but also we are slowly moving towards electrification,” he noted.

The automaker plans to have individual growth strategies for its four brands — Jaguar, Range Rover, Discovery and Defender, Hoornik said.

Each of those brands should have their own growth strategy, retail landscape and their own audience, he noted.

“In a country that is so big, with so much diversity, I think there’s a role for each of the brands to play,” Hoornik said.

He noted that in April-June period of this fiscal, the company’s sales in India grew over 100 per cent and the automaker expected to keep the momentum going in the rest of the fiscal.

“It is also important that we grow our order bank… it grew about 50-plus per cent within the same timeframe (first quarter)…it is very clear that it is looking bright (future) for us here,” Hoornik said.

He noted that JLR being a part of the Tata Group is a very positive factor due to the trust equation which the general population has with the diversified conglomerate.

Hoornik noted that JLR has a very positive outlook on the growth of the overall luxury car market in India.

High GDP growth rate, young population and rapid development of road infrastructure were some of the factors which bode well for the growth of the industry going ahead, he noted.

“The positivity in the energy of India will carry it through,” Hoornik said.

Earlier this year, Tata Group announced an investment of 4 billion pounds to set up a flagship factory to make batteries for Jaguar Land Rover as well as other manufacturers.

The group chose Bridgwater in Somerset in southwest England for the gigafactory over a rival location in Spain.

The gigafactory, at 40GWh, will be one of the largest in Europe and Tata’s first outside of India.

It will supply JLR’s future battery-electric models, including the Range Rover, Defender, Discovery and Jaguar brands, with the potential to also supply other car manufacturers.

Production at the new gigafactory is due to start in 2026. PTI MSS SHW ANU ANU