Jaguar Land Rover’s Indian owner is spinning off its automobile division to prepare for an electric vehicle-centric future.
Tata Motors announced Monday that its existing auto business will be divided into passenger cars and commercial vehicle.
The first will concentrate on electric vehicles, while the second will produce larger vehicles like trucks and buses.
The Tata & Sons conglomerate is the largest shareholder in each business.
Tata, based in Mumbai, said that the merger would allow the businesses to pursue individual strategies. It noted there were “considerable” synergies to be gained in the passenger vehicle business “particularly in areas such as EVs and autonomous vehicles”.
Investors who are betting on the future of petrol and diesel will be able to invest in the EV-led part of the business.
JLR will invest 15 billion pounds sterling over five years in order to convert their UK factories to produce battery-powered versions for its Jaguar sports car and Range Rover SUVs.
The first Range Rover fully electric is expected to be released later this year. More than 16,000 people are reportedly waiting on the list.
N Chandrasekaran said that Tata Motors had made a significant turnaround over the past few years.
“The three business units in the automotive industry are now independent and deliver consistent performance.
This demerger allows them to better capitalize on opportunities offered by the market, by improving their focus and agility.
This will result in a better experience for our clients, improved growth prospects for employees and increased value for shareholders.
Tata Motors’ board will now consider the proposal. Tata Motors said that the proposal will be reviewed by its board.
Tata is India’s largest carmaker, and its position on the SUV and electric vehicle markets has made it the most valuable.
In the last year, shares of the carmaker have risen by more than 124pc.
Tata & Sons may also consider a spin-off and listing for Agratas, a battery company that is building a £4bn “gigafactory” in Somerset.
The plant will be operational in 2026, and it will become one of the largest in Europe.