Mumbai, Mar 4, 2024: In a groundbreaking corporate strategy, Tata Motors Limited (TML) today announced a significant overhaul of its business structure, akin to a magician’s classic act of splitting themselves in two, but with a corporate twist. The Board of Directors, in a move that could only be described as ‘separating the twins,’ has given the green light to bifurcate Tata Motors into two distinct entities. This split will see the company’s Commercial Vehicles (CV) business and related investments branch out on one side, while the Passenger Vehicles (PV), Electric Vehicles (EV), Jaguar Land Rover (JLR), and their related investments parade into another, proudly independent entity.
In what appears to be a seamless act of corporate prestidigitation, the demerger will be executed via an NCLT scheme of arrangement, ensuring that all shareholders retain their stakes equally in both newly minted entities. Over recent years, the CV, PV+EV, and JLR divisions have been flexing their muscles independently, each under the command of their CEOs, showcasing stellar performances and distinct strategic victories.
This strategic uncoupling follows the subsidiarisation of the PV and EV divisions in 2022 and is touted as a masterstroke to provide these units with the autonomy to chase their dreams – of higher growth, nimble footedness, and reinforced accountability. While the CV and PV sectors waved goodbye to synergies long ago, the PV, EV, and JLR domains are about to embark on a synergistic spree, especially in the realms of EVs, autonomous vehicles, and cutting-edge vehicle software.
Chairman N Chandrasekaran, in a statement dripping with optimism, declared, “Tata Motors has been on a turbocharged journey of transformation, with each of our automotive business units racing ahead on their own tracks. This demerger is not just a corporate shuffle; it’s our way of gearing up for the fast lane, ensuring a smoother ride for our customers, a more exhilarating journey for our employees, and a treasure map for our shareholders.”
The scheme awaits the nod from the TML Board, followed by a series of regulatory green lights, which could extend the pit stop by another 12-15 months. However, the company assures this maneuver is all gain and no pain, promising no bumps on the road for employees, customers, or business partners.
