Mumbai: Tata Motors on Friday said its board has approved to carve out its passenger vehicle business, including electric vehicle vertical, into a separate standalone entity.
The company's board has in-principle approved to subsidiarise company's passenger vehicle (PV) business (including EV) by transferring relevant assets, IPs and employees directly relatable to the PV business for it to be fully functional on a standalone basis through a slump sale, Tata Motors Ltd (TML) said.
However, certain shared services and central functions will be retained at TML to deliver cost efficiencies for the entire group, it added. The proposed transfer shall be implemented through a scheme of arrangement, which will be tabled for board approval over the next few weeks, the auto major said.
"We expect the transfer process to be completed in the next one year," it added. The company's move would separate commercial vehicle business from PV vertical.
Elaborating on the rationale for taking such a step, TML said the PV business landscape is seeing rapid transformation in the form of tightening emission norms, push towards electrification, enhanced disruptions from autonomous and connected technologies.
