The Board of Directors at Tata Motors has approved the demerger of its commercial vehicles business into a separate wholly-owned subsidiary. The new entity is proposed to be named “TML Commercial Vehicles Limited” or another name subject to approval by the Ministry of Corporate Affairs, as informed by the company in a regulatory filing on Tuesday.
The demerger will see Tata Motors’ commercial vehicles (CV) business operate independently, while the company’s other segments, including Passenger Vehicles (PV), Electric Vehicles (EV), and Jaguar Land Rover (JLR), will continue under the existing entity.
Natarajan Chandrasekaran, Chairman of Tata Motors, highlighted in the company’s latest annual report that this strategic move is aimed at empowering each business unit and enhancing their agility and accountability. In his address to shareholders during Tata Motors’ 79th annual general meeting, Chandrasekaran emphasized that the demerger is pivotal for executing well-differentiated strategies tailored to the distinct market dynamics and strengths of both businesses.
“The demerger of Tata Motors’ commercial vehicle and passenger vehicle businesses will enable each entity to focus on its unique strengths and market opportunities,” Chandrasekaran stated. “This move is crucial for driving forward our vision of creating greater value for our shareholders and better serving our diverse customer base.”
The establishment of TML Commercial Vehicles Limited is expected to bring sharper focus and efficiency to Tata Motors’ commercial vehicle operations, facilitating targeted growth and innovation in this segment. The company’s ongoing commitment to its PV, EV, and JLR businesses remains steadfast, ensuring continued excellence and leadership in these markets.
This decision marks a significant milestone in Tata Motors’ strategic evolution, promising enhanced operational clarity and market responsiveness across its diverse automotive portfolio.