Tata Motors' board has given its in-principal approval to subsidiarize the company's Passenger Vehicles (PV) including Electric Vehicles (EV) business into a separate subsidiary.
This decision is a first step in the company's plans to secure mutually beneficial strategic alliances for the domestic PV business and help secure its long-term viability, Tata Motors said in an exchange filing.
"Tata Motors Ltd (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," the company statement said.
However, certain shared services and central functions will be retained at TML to deliver cost efficiencies for the entire group, it added.
"This shall help provide differentiated focus for the PV and CV businesses and help each of them realize their potential," it said.
Tata Motors expects the transfer process to be completed in the next one year.
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, the company said.
It also noted that the recent outbreak of COVID-19 virus has increased the challenges faced by the business.
The company also announced the appointment of Shailesh Chandra, President, EV and Corporate Strategy as President PV business including EV with effect from April1, 2020. He will be assuming responsibility for the PV business from Mayank Pareek.
Mayank Pareek will be superannuating from Tata Motors at the end of February 2021, the statement added.
First Published: IST