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Tata Motors to hive off its passenger vehicle biz into a separate subsidiary, Shailesh Chandra to take charge

The passenger vehicles subsidiary will be headed by Shailersh Chandra, who is presently the electric vehicles business head at Tata Motors. Chandra will take over as the president of the passenger vehicles business from 1 April from Mayank Pareek, who is set to retire.

Last Updated: Mar 27, 2020, 04.10 PM IST
This could be seen as a step towards Tata Motors forging future alliances for its passenger vehicles business to get better cost economics.
MUMBAI: In a bid to secure its domestic passenger vehicle (PV) business and seek a strategic partnership, Tata Motors will hive off the car business including electric vehicles into a separate subsidiary.

Shailesh Chandra, president of electric vehicles (EV) and corporate strategy has been appointed president for the PV business including EV business with effect from April 1, 2020, and Mayank Pareek who is currently President of PV business will be superannuating from Tata Motors at the end of February 2021.

“A move towards immediate subsidiarization of the PV business is the first step in securing mutually beneficial strategic alliances that provide access to products, architectures, powertrains, new-age technologies and capital,” the company said in a statement.

To be sure, Tata Motors for long has relied on the support of the commercial vehicle business and dividend from Jaguar Land Rover to ensure that the car business stays afloat.

In the past, it explored strategic partnerships with the likes of Groupe PSA, Volkswagen Group and Chery Automobiles from time to time. The hiving off will enable the company to move in that direction more easily.

The split of its domestic passenger vehicles business, including electric vehicles, into a separate subsidiary is likely to be concluded over the next one year.

The proposal has received in-principle approval from its board, the company said in an exchange notification.

The carmaker had invested in a completely new passenger vehicle portfolio in recent years based on new architectures. However, the recent outbreak of COVID-19 virus increases the challenges faced by the business, the company said.

Alliances have been formed by multiple global automakers to reduce the cost of development at a time when technological advancements are making vehicles obsolete within a few short years.

Over the last few years, the company's passenger vehicle business has implemented a strong turnaround plan and has earned its right to grow by launching a slew of successful products Like the Tiago, Tigor, Nexon, Hexa, Harrier and most recently the Altroz and Nexon EV, the company said.
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