Tata Motors on Friday announced that it would branch out its passenger vehicles' business (including electric vehicles) into a separate unit amid a slump in sales owing to a national lockdown to check the spread of coronavirus pandemic in India.
A press statement from the company made the announcement. "TML Board has in-principle approved to subsidarize TML's PV business (including EV) by transferring relevant assets, IPs and employees directly relatable to the PV business for it to be fully functional on a standalone basis through a slump in sales," it read. "However, certain shared services and central functions will be retained at TML to deliver cost efficiencies for the entire group. The proposed transfer shall be implemented through a scheme of arrangement, which will be tabled for approval to the TML Board over the next few weeks."
Tata Motors has also appointed Shailesh Chandra as President of PV business, including EV, from April 1. He was previously President EV and Corporate Startegy and takes over from Mayank Pareek who will be superannuating from Tata Motors at the end of February, 2021.
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The company also stated that it recognises the changing dynamics of PV business in India and the increasing aspirations of buyers here. "The Passenger Vehicle business landscape is seeing rapid transformation in the form of tightening emission norms, push towards electrification, enhanced disruptions from autonomous and connected technologies," it said. "Additionally, India continues to remain an attractive market for global OEMs while the aspiration levels of the Indian consumer continue to rise requiring stepped up investments in contemporary products in a competitive market."
Tata Motors also said it recognises the increased challenges in the face of coronavirus outbreak and that it remains committed to ensuring health and safety of its employees.
Almost every major OEM in India, and even in other parts of the world, has suspended production due to lock downs. Market experts predict the remainder of 2020 to be an extremely challenging year for the global automotive sector with disruptions in supply lines and nosediving demand as people at large look to shore up their personal finances.