Tata Motors To Split Passenger And Commercial Vehicle Businesses Into Two Separate Companies

Tata Motors said on Monday that the company’s commercial vehicle division will operate independently from its passenger vehicle division, which includes JLRs and EVs.

The plan to divide Tata Motors into two distinct publicly traded companies has been approved by the Board of Directors. A statement from the corporation stated that two businesses will be created as a result of the demerger: one for passenger vehicles and one for commercial vehicles.

The demerger will be implemented through an NCLT scheme of arrangement, and all shareholders of TML shall continue to have identical shareholding in both the listed entities

The company said in the release

The demerger is a logical progression of the subsidiarisation of PV and EV businesses done earlier in 2022 and shall further empower the respective businesses to pursue their respective strategies to deliver higher growths with greater agility while reinforcing accountability. Furthermore, while there are limited synergies between Commercial Vehicles (CV) and Passenger Vehicles (PV) 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’s three automotive business segments are currently running independently and performing well. According to N. Chandrasekaran, chairman of the Tata Group, the demerger will benefit the business and provide more focus on it.

“This will lead to a superior experience for our customers, better growth prospects for our employees, and enhanced value for our shareholders,” he said. This process will provide a better experience for its customers, growth for its employees, and good value for its shareholders.

The process of demerging could take a full year or more to finish. According to Tata Motors, there won’t be any negative effects from the demerger on partners in business, customers, or staff.