Tata Motors will not sell off Jaguar Land Rover
The chairman of Tata Sons, N Chandrasekaran put to rest rumours of his group looking to sell off Tata Motors' premium Jaguar Land Rover arm.
This is an excerpt from a longer interview with CNBC-TV18's Shereen Bhan, where the head of Tata Motors' holding company clarifies his firm's stand on the British brands.
Let me once and for all get you to clarify on the rumours as I said that keep coming back on JLR and whether you are looking at putting JLR on the block. Is there any truth to that?
I have said no.
Not to us.
I have said no to anybody who has asked me. In business, you have to be careful. It is very dangerous and imprudent for you to make any categorical statement. However, I have clarified with a lot of clarity and certainty that we are committed to Tata Motors and JLR business. We are on a path of transforming that company because that company has got great brands, very successful products, and at the same time it has to invest capital. We need more products and at the same time, we have to get into electric vehicles and also we have to think about future business models.
That is the journey we are on, but we are trying to at the same time conserve capital. We are trying to be very efficient in our capital allocation and all we are trying to do is whether we can keep the capex under the operating cash flow. We have shown that in the last three or four quarters, we said that we would take actions and the management has taken those actions, and that is why you have seen the performance improvement which came about this quarter. This is not one-off, this is not about gains here and gains there, this is primarily due to a lot of hard work. For us, it is important to get the sales going and what partnerships we will do, I cannot tell you. What form and manner it will look at, I cannot tell you.
Have you spoken with anybody, have conversations happened with one or many people?
In the auto industry, every original equipment manufacturer (OEM) talks to every other OEM.
So you have spoken with one or many?
People reach out to you and people talk to you. We all exchange notes but whether we have any deal construct with anybody. No.
When you talk about partnerships, is it going to be one partnership or will it be one partnership for JLR and a different partnership for the domestic market?
Don't know. We will have to do what is right. If you see what is our goal. Our goal is that this company has got a great future and the next two to three years from JLR point of view especially is going to be very tough because of the capital that is required and the moment a little bit uptick happens in sales, things can change dramatically. From the domestic market point of view, from a CV business, we have got an excellent business. We just need the CV market especially the medium and heavy commercial vehicles (M&HCV) to come back as their demand has halved, sales have halved. From the passenger car point of view, we have a lot of work to do as now, we have some models which everybody is appreciating. The last two to three models have received a lot of traction from the market but still, we have a long way to go as we are operating on a very low market share and we also have to now make a bet on the EV, so it's a lot of work to be done.
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