Tata Motors is Actively Probing Partner for its Passenger Vehicle Biz

Auto major, Tata Motors is vigorously in search of a partner for its passenger vehicle business. Tata is working on its business to enhance its growth in the next decade which would witness huge investments going into new technologies, regulations, say sources close to the company.

Although Tata is planning to crave out passenger vehicle business as a separate standalone unit, it is looking for a collaborating partner to gather steam. Earlier this year, the company’s board has approved the formation of a separate entity which would house the PV business that includes the electric vehicles vertical by transferring relevant assets, intellectual property, and employees directly.

In an interview, Shailesh Chandra, President Passenger Vehicles Business Unit, Tata Motors, told PTI, “The whole purpose of subsidiarisation is to actively look for a partner because this is a reality for all of us that a collaboration can unleash a bigger potential in the next decade which is going to see significant investments in new technologies and regulations.”
He further adds, “All this requires huge investments and agility is also the key. So this is something which we are actively looking into.”

The company is expecting that the collaboration would further aid in reducing product lifecycles and enhance new product launch intensity. Also, he pointed out that the subsidiaristaion process is on, and the company is aggressively looking for a partner. In addition to this, the company is also intending to create assets and capabilities with a win-win situation for both parties.

On questioning about the timelines for both the initiatives, Shailesh hints, “There are no specific timelines... as far as subsidiarisation process is concerned, converting the business into a separate legal entity, we would like to accelerate in a year and as far as a partner is concerned it is an active work which we will continue to work on.”

Furthermore, commenting on the company’s performance in the PV segment, Shailesh states that despite the lockdown, the company’s growth had doubled during the first half of this fiscal. He continues, “This has resulted in a market share of 7.9 percent in the passenger vehicle segment... the company's product range has been appreciated for safety and pleasure of driving. A big part of it is pent up demand, which has been a big factor for the growth. There was 20 percent de-growth last year because people wanted to wait for BS-VI products leading to pent up demand in the last year itself. Further two months of lockdown this year has led to huge pent up demand,"

Also, the PV segment has been noticing growth revival as the sales grew by 18 percent in the July- September quarter this fiscal. Shailesh states that demand would endure during the pandemic period as people prefer personal mobility over public transport.

Shailesh further adds, "It remains speculative how the things would turn out to be beyond that and festive season because something is offsetting these positive trends -- pent up demand combined with personal mobility needs. It is the whole macro economic situation which is not witnessing growth, GDP is expected to see a 10 percent decline. We will have to see the overall effect of that post the festive season. So far indications are that it will sustain."