Tata Motors will have one company for commercial vehicles and one for passenger vehicles including JLR.
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Tata Motors will have one company for commercial vehicles and one for passenger vehicles including JLR.
Tata Motors has announced that it will soon demerge the brand into two separate companies – one for its commercial vehicles and one for its passenger vehicles. Currently, Tata Motors has yet to finalise how both the companies’ names will be differentiated.
The Indian marque says the demerger will be implemented through a National Company Law Tribunal (NCLT) scheme of arrangement and all current stakeholders will have an identical shareholding in both companies. The commercial vehicle and its related investments will become one identity, while the passenger vehicle business will have cars, sedans, SUVs, electric vehicles, JLR (Jaguar and Land Rover) and its related investments clubbed together.
N Chandrasekaran, Chairman of Tata Motors, said, “Tata Motors has scripted a strong turnaround in the last few years. The three automotive business units are now operating independently and delivering consistent performance. This demerger will help them better capitalise on the opportunities provided by the market by enhancing their focus and agility. This will lead to a superior experience for our customers, better growth prospects for our employees and, enhanced value for our shareholders.”
After the NCLT scheme of arrangement is shown to the board of directors at Tata Motors in the coming months, the demerger could take another 12-15 months to be finalised after all approvals from necessary stakeholders, creditors and regulatory bodies. Tata Motors also mentioned that this will not impact any of the employees, customers or business partners.
The three divisions of Tata Motors – Commercial Vehicles, Passenger Vehicles and JLR – have been doing well financially recently. In the third quarter of financial year 2024, Tata Motors earned a profit of ₹7,100 crore with total revenue of ₹1,10,577 crore. Of this, the commercial vehicle business had a total revenue of ₹20,123 crore, the passenger vehicle business posted a total revenue of ₹12,190 crore, and JLR had a revenue of around ₹77,982 crore (GBP 7.375 billion).
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