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Tata Motors says demerger will allow all businesses to unlock potential

LivemintLivemint · 1y ago
Tata Motors says demerger will allow all businesses to unlock potential
Medial

Tata Motors plans to demerge into two separate commercial and passenger vehicle entities, allowing each to better utilize cash flows and focus on specific growth strategies. The commercial vehicles (CV) unit, responsible for significant cash generation, will have the ability to invest in its own strategic goals. The passenger vehicles (PV) business, which is becoming self-sustainable, aims to achieve 10% EBITDA margins across combustion engine and electric vehicle segments. The demerger is expected to take 12 months and gross debt will be split proportionally between the two new entities. Jaguar Land Rover will remain a subsidiary of the top company, with no current plans for its demerger.

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Tata Motors to demerge commercial and passenger vehicle businesses

ThehindubusinesslineThehindubusinessline · 1y ago
Tata Motors to demerge commercial and passenger vehicle businesses
Medial

Tata Motors will separate its passenger vehicles and commercial vehicles businesses into two distinct entities through a demerger. This move aims to unlock value for the company's businesses and enable each entity to pursue its strategies independently. The demerger follows a series of decisions by Tata Motors to run its different businesses separately, including appointing separate CEOs for each unit. Analysts believe the demerger will cushion the passenger vehicle business from the cyclical nature of the commercial auto market and allow the company to leverage synergies in the passenger vehicle business, particularly in the areas of electric vehicles, autonomous vehicles, and vehicle software.

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