Key Points
A few years later, Tata Steel merged six of its subsidiaries and an associate company with itself to consolidate all the metals and mining businesses...
The demerging of Tata Motors now into two separate entities could be seen as contrary to the consolidation agenda but is part of the overarching plan to make the governance and management of group companies lighter, agile and more effective, if not with consolidation then demerger..
Tata Motors has said while there are limited synergies between CV and PV businesses, there are considerable synergies to be harnessed across PV, EV and JLR particularly in the areas of EVs, autonomous vehicles, and vehicle software which the demerger will help secure...
"Historically, while the CV business has been generating healthy cash flows, the PV business has witnessed challenges in consistent cash flow generation due to its high spending on product development and the re-building phase in its market positioning," Since 2021, the three businesses - CV, PV+EV, and JLR - have been operating independently under different CEOs.. Nomura said Tata Motors's PV business has more potential to create value over the next few years as it has seen a remarkable turnaround after 2020 with market share ramping up from mid-single digits to 13.5% currently..
We expect that EV margins will improve over time as most of the losses come from product development costs," Nomura said.. With JLR currently generating about 70% of Tata Motors' consolidated revenue, the move will likely see the listed passenger vehicle business eclipse the listed commercial vehicle entity in revenue terms...
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