Jaguar owner to spin off cars unit to seek strategic allies
By BLOOMBERG | 27 March 2020
MUMBAI: Tata Motors Ltd., the Indian owner of Jaguar Land Rover, plans to separate its cars business from trucks and buses, as the company seeks partners for a unit slammed by the coronavirus outbreak and a global shift to electric vehicles.
Car sales in India fell for a 16th consecutive month in February, and that’s set to continue as the virus outbreak limits travel nationwide, and financing new vehicles becomes difficult.
Automakers are cutting investment and production, and job losses in the sector, which employs more than 32 million people directly and indirectly, climbed to half a million even before the pandemic.
"The recent outbreak of Covid-19 virus increases the challenges faced by the business,” Tata Motors said in a statement today.
"This decision is a first step in our plans to secure mutually beneficial strategic alliances for the domestic PV business and help secure its long-term viability.”
Lockdowns across the world to stymie the virus have severely hurt consumer demand, and prompted Moody’s Investors Service to put Tata Motors’ credit rating on review for a downgrade. An investor will bring the much needed cash to revive sales.
"It is something Tata should have done many years ago,” said Ashvin Chotai, managing director, Intelligence automotive Asia. Still, "I would have thought Tata would have more fundamental challenges to address in the current environment than to this reorganisation.”
JLR, the British luxury carmaker, in January shelved plans to issue a US dollar bond after investors demanded too high an interest rate to compensate for the risk the coronavirus poses, Bloomberg News reported in January.
Tata Motors also appointed Shailesh Chandra, head of its electric vehicles business, as the head of the cars unit. He will replace Mayank Pareek, who will retire by the end of February, 2021, according to the statement.
Tata Group bought the maker of the Jaguar XE sedan and the Land Rover Discovery sport utility vehicle from Ford Motor Co. in 2008 for US$2.3 billion.
The Indian salt-to-software conglomerate has been exploring strategic options for JLR, including a potential stake sale, people familiar with the matter have said. Tata Group has denied that.
Tags
Autos Jaguar
Reviews

Porsche Taycan E-xperience drive: Kuala Lumpur - Kuantan

Mercedes-Benz E 350 e PHEV: Refined elegance, timeless prest...

8.4
Mercedes-Benz E 350 e AMG Line: Best of both worlds

7.9
Xpeng G6 580 Pro: Fresh and fluidic

Guangzhou adventures: Zontes 368 scooter and 703 Adventure m...

7.6
Maserati GranTurismo (Mk2) Modena: Sharp and smooth operator

6.8
Triumph Tiger 900 GT Pro: Multi-talented adventurer

Hyundai Ioniq 5 N: Born rascal
Videos

StarCarSifu Editors' Choice Awards 2024: Top winners

The Snowball – Lamborghini’s Heartwarming Christmas Story of...

EVOGO battery swapping solution showcased at IAA Mobility 20...
