Tata Motors has approved a plan to subsidiarize  Passenger Vehicles (PV) including Electric Vehicles (EV) business into a separate subsidiary through a scheme of arrangement. TML Board has in-principle approved to subsidiarize 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 sale. However, certain shared services and central functions will be retained at TML to deliver cost efficiencies for the entire group.

The Passenger Vehicle business landscape is seeing a rapid transformation in the form of tightening emission norms, push towards electrification, enhanced disruptions from autonomous and connected technologies. 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.

Over the last few years, TML’s PV business has implemented a strong turnaround 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. A fully refreshed BSVI ready product portfolio based on the Impact 2.0 design philosophy, consistently improving NPS scores, improved retail market shares and exciting entry into the EV space coupled with improved profitability makes the business ready to realise its potential.

The new subsidiary would be led by the current president of the EV business, Shailesh Chandra from April 1 while the current managing director of the PV business unit Mayank Pareek will retire from the company in February next year.