Update – Tata Motors issued an official statement :
Unconfirmed and unsubstantiated reports have recently been published by some media on Tata Motors Passenger Vehicle stake sale and potential partners. In this context, Tata Motors clarifies that:
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. Firstly, TML is India’s foremost homegrown auto company. Its products are receiving strong customer response with its best-in-class safety, stylish design and superior driveability. Over the years, initiatives taken by Tata Motors have and will continue to strengthen India and its auto sector. In March 2020, TML had announced the intent to subsidiaries its PV business as the first step towards securing mutually beneficial strategic alliances that provide access to products, architectures, powertrains, new-age technologies and capital.
Securing a mutually beneficial alliance is a priority. However, it is not imperative for today but an opportunity to be secured for tomorrow. The imperative for today is to Win Sustainably by delivering market-beating growth and positive free cash flows by delighting our customers with exciting products and exceptional service while continuing to drive a strong cost savings agenda.
Tata Motors is in talks with European and East Asian manufacturers including Geely, Changan and Chery along with Groupe PSA
According to a recent report emerged on the internet, Tata Motors has been seeking a foreign partner for its domestic passenger vehicle operations moving forwards into the future. The homegrown automaker plays an integral role in the Tata Group and is a fully owned subsidiary. However, it is reportedly convening with several global auto majors.
This is said to result in Tata Group selling 49 per cent of its stakes in Tata Motors that contributed to 4 per cent of its turnover in the last fiscal. An official from Tata Motors has allegedly said that the brand intends to run its PV business and thus it will hold the majority stake and control. The company has had many ups and downs in recent years and its aggressive product strategy has paid dividends.
TML Business Analytics Services will give shares to Tata Motors towards the Rs. 9,417 crore payment and when the business separates, the brand will accompany the CV business and investments in Jaguar Land Rover that was bought more than 12 years ago. Tata Motors has a famed history on the Indian soil and it began producing commercial vehicles in 1954.
In the 1980s, Tata Motors formerly known as Telco entered into the passenger vehicle business. Tata is reportedly in talks with European and East Asian manufacturers including Chinese firms like Geely (owner of Volvo Cars), Changan and Chery (whose Tiggo 5X platform was said to give rise to a mid-size Tata SUV) and Chinese state-owned Changan Automobile.
Chery Automobile is also Jaguar Land Rover’s associate in China and has years of experience working with the British luxury carmaker as it holds 50 per cent stake in the JV. However, the unfavourable social circumstances might have hindered any progress over the strategic partnership talks. Tata has also spoken with Groupe PSA, whose Citroen brand will launch in India early next year.
It must be noted that PSA and FCA are already in talks over a merger that was claimed to be a done deal. Tata Motors’ previous moves on an alliance with Volkswagen to develop an affordable passenger vehicle fell through but a partnership is said to be the “future of our passenger vehicle business,” – a Tata official was quoted saying.