Tata Motors' shareholders approve splitting off passenger vehicle business into new entity
Tata Motors' shareholders have overwhelmingly voted in favour of hiving off the passenger vehicle business, including the EV division, to a new entity, a decision that was approved in principle last March. The new subsidiary valued at Rs 9,417cr, will fall under TML Business Analytics Services Services Limited, and will allow Tata Motors to provide differentiated focus for its passenger vehicle business, as well as its commercial vehicle vertical, to help each realise their full potential.
As we had reported, Tata Motors has chosen to do this so that it becomes easier for the company engage in mutually beneficial strategic alliance, possibly with other car-makers, to gain access to products, architectures, powertrains, technologies and funding. As part of the announcement, Tata Motors will seek a strategic partner to help secure its passenger vehicle business' long-term viability, though a specific partner has not been announced yet. The company says that its passenger business has performed well in the last few years, given the range of new products, growth in market share, development of new technologies and so on. This move is expected to realise that potential further.
Interestingly, while speculations were rife about Tesla partnering with Tata Motors for its entry into the Indian market, those rumours could perhaps be put to rest. Tata Sons chairman N Chandrasekaran is reported to have confirmed that no discussions are on, and that Tata Motors will continue strengthening its EV line-up in India on its own. The Altroz EV is expected to join the Nexon EV in the all-electric range later this year.
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