Tata Motors To Form Rs. 9400 Crores Subsidiary, Looking For Foreign Partner
The new subsidiary that will have a foreign partner would likely help Tata overcome its market struggles.
UPDATE – Tata Motors has sent out an official communication and the company has refuted the claims by stating the following – All such published news about ‘Tata Motors to sell up to 49% stake in PV Business’ and the names of potential partners/investors mentioned is incorrect and misleading.
Tata Motors is on the lookout for a foreign partner to jointly run its India passenger vehicle business. Also, it is set to transfer the unit to a wholly-owned subsidiary for Rs. 9417 crores.
To be formed from the TML Business Analytics Services, the Tata Motors subsidiary will be renamed Tata Motors Passenger Vehicles. It will issue fresh shares to Tata Motors for the over Rs. 9400 crores payment it will receive.
The Tata Group is currently in talks with many automakers to sell up to 49 percent stake in its India passenger vehicle business that will also have in its kitty the e-vehicle business.
So far it has held talks with Chinese firms like Geely, Changan and Chery, the latter is a 50 percent partner in Jaguar Land Rover’s China venture. Tata Motors acquired Jaguar Land Rover (JLR) from Ford for $2.3 billion about 12 years ago.
However, deal-making with Chinese automakers has been impacted due to the current complicated situation between India and China.
Tata has also been in talks with PSA Group. But PSA’s merger with FCA is slowing things down and FCA already has a manufacturing joint venture with Tata in India.
In the recent past, Tata and Volkswagen held talks to develop an economy car, but that did not work out.
If everything goes to plan, then Tata will be left with its commercial vehicle business, JLR and other subsidiaries. The passenger car business that will now be run by the Tata Motors subsidiary accounted for 4 percent or Rs. 10,297 crores of Tata’s total turnover in FY20.
Source – TimesofIndia.com