Tata Motors in talks for tech & funding tie-up to bring domestic passenger vehicle business back on track | Economic Times

Mumbai: Tata Motors has started preliminary discussions for a technology and funding tie-up, even as it kicks off a transformative process to get its domestic passenger vehicle (PV) business back on track. Focus is to build an agile organisation that is more accountable and able to generate free cash flows within two years to support future growth, said Shailesh Chandra, president, PV business unit of Tata Motors in an exclusive interaction with ET. “We have started some preliminary engagement, but it is too early and will take its time. What shape the collaboration will take is too early to say. We will finalise that when we get the right partner," he said. “Tata Motors enjoys presence in segments that are future-relevant and growing fast in the Indian market and a partnership can add to this strength to unleash ourselves better. We are well-poised to build a profitable and sustainable business,” Chandra added. In March, the board approved a plan to carve out the company’s PV business (including EVs) to secure “mutually beneficial strategic alliances” for access to products, architecture, powertrains, new-age tech and capital.77711849The subsidiary will have to be approved by stock exchanges, the companies law tribunal and shareholders, which may take a year, Chandra said. Tata Motors will separate the assets and intellectual properties (IPs) of the PV business, while resources share in common with the CV business -- engine and powertrain development -- will exploit continued synergies. Tata Motors has been feeling the heat in the PV space for years and some of its launches have not hit the mark in an evolving market. The homegrown auto major posted consolidated net loss of Rs 8,437.99 crore in the quarter ended June, widening significantly from its Rs 3,698.34 crore loss in the corresponding quarter last year. Several names as potential partners are doing the rounds, but the company will be circumspect about previous associations, though it requires a strong partner to claw back into the market share game. “We are already back in the game as No.3 player in PV with Q1 market share of 9.5% as against 4.8% in FY20. Going forward, in the SUV space, we will have a holistic presence with compact SUV Nexon, midsize SUV Harrier, and our future launches -Gravitas and Hornbill - in sub-compact SUVs," said Chandra. In April-July, Nexon and Harrier helped it to clock sales of 9,789 units. In the previous fiscal year, its utility vehicle sales were down 25% to 59,380 units. “The focus for now is to reimagine the brand; parallelly we are building on our strengths in the PV business. We are one of the few auto companies in India with an end-to-end automotive value chain capability that includes our ability to engineer our solutions more cost effectively and nuanced to the local needs,” Chandra said. This will make the PV unit flexible with dedicated cross-functional resources. The new entity will have a culture that is agile and accountable. "We will change our culture, not just for the heck of it, but to be relevant in the changing context of the PV market, while including the best of the Tata values and customer centricity," he said. “We have two architectures on which we will build our products. We have launched refreshed models that are being appreciated. We see consumer profile is getting younger and they are veering towards SUVs and we are therefore working towards that,” he said.