The proposed demerger of Tata Motors‘ existing automotive business into two separate listed entities will enable the commercial vehicle (CV) segment to become more agile and capitalize on global opportunities, according to Girish Wagh, Executive Director of Tata Motors. This strategic move, announced in March this year, aims to better position the company’s distinct business segments for growth.
![Girish Wagh](https://themachinemaker.com/wp-content/uploads/2024/06/girish-wagh.png)
The demerger plan involves creating two entities: one dedicated to the commercial vehicle business and its related investments, and another focused on the passenger vehicle (PV) business, including electric vehicles (EVs), Jaguar Land Rover (JLR), and their associated investments. “The proposed demerger will help us improve focus and make us more agile to capitalize on opportunities in the CV market globally,” stated Wagh, who leads Tata Motors’ commercial vehicle division, in a message to shareholders in the company’s 2023-24 Annual Report.
Tata Motors believes the demerger will also facilitate synergies across the PV, EV, and JLR segments, particularly in areas such as EVs, autonomous vehicles, and vehicle software.
Looking ahead, Wagh expressed optimism about the sales outlook for the commercial vehicle industry. “I expect FY25 to be yet another exciting year for the CV industry, given the favorable macroeconomic context, especially in the domestic market,” he noted. He highlighted that Tata Motors’ CV business has been delivering strong operational and financial performance and emphasized the focus on creating a world-class company in the CV space. This transformation aims to provide superior experiences to customers, better growth prospects for employees, and enhanced value for shareholders.
Shailesh Chandra, Managing Director of Tata Motors Passenger Vehicles, also shared insights with shareholders, projecting that the PV industry will moderate towards a long-term secular growth rate after three consecutive years of robust growth. Chandra noted the increasing customer preference for safer, smarter, and greener vehicles powered by CNG and batteries. He also mentioned that SUVs will continue to dominate the market landscape, offering more options for customers.
This strategic demerger represents a significant step for Tata Motors as it seeks to enhance its competitiveness and leverage emerging opportunities in both domestic and international markets.