Tata Motor continues its tumultuous journey of passenger vehicle which never found any anchor since it relegated from the second largest spot to the fourth now, and aims to snatch the sweet spot as it embarks a new journey into the highly aspirational car business.
Much has been done to revive the sagging fortunes of its cars and SUV business that once had bestsellers like Indica and Sumo to its fame, but nevertheless, comes another try with a Chinese partner to take on the competition.
News of its global ally, Chinese Chery is so strong that many professionals staring at tough times in the auto market post the coronavirus pandemic, have started eyeing the entity that would have a new structure and pay rolls independent of the commercial vehicle business for their future employment.
The new entity will have separate payroll of employees that will allow smooth transmission from the current Tata Motor Limited. Not much was said when Tata Motors announced the hiving of its passenger vehicle business from the formal association with the highly profitable (notwithstanding the current virus situation) commercial vehicle business that dominates the Indian market.
In a statement, the company stated, “Tata Motors Ltd (TML) Board approves plan to subsidiarize TML’s Passenger Vehicles (PV) including Electric Vehicles (EV) business into a separate subsidiary through a scheme of arrangement”
The new entity shaping up with a majority control with Tata’s and Chery coming as a strategic investor and technology partner is expected to bring a new lease to the languishing and headless car business that has now seen amalgamation with the electric vehicle unit.
Tata Motors has also undertaken due diligence of a few more companies, but now mostly Chinese are being considered. While people with knowledge of the matter said that the process is led by its Managing Director Guenter Butschek, a key role is being played by newly appointed President of the PV business Shailesh Chandra, who took over the responsibility from its former President and industry veteran Mayank Pareek from April 1 this year. They had also scrutinized American and Korean carmakers in the past but now the tide is in favour of Chinese that are currently on an acquisition spree globally.
