Tata Motors’ demerger process to split its Commercial Vehicles and Passenger Vehicles businesses (including EVs and Jaguar Land Rover) into two independently listed companies is expected to be completed in the second half of 2025, said Tata Sons and Tata Motors Chairman N Chandrasekaran in the company’s 80th Integrated Annual Report.
“The proposed demerger will bring greater strategic clarity and agility, enabling a more focused approach to execution and value creation, delivering superior experiences for customers, rewarding careers for employees, and long-term returns for shareholders,” Chandrasekaran said.
He added, “Enabling corporate actions to streamline the capital structure of the company and enhance its operational focus gathered pace during the year with the successful delisting of its DVRs and the merger of Tata Motors Finance Ltd. with Tata Capital Ltd. In early FY26, your company’s shareholders approved the demerger which is expected to be effective during the second half of 2025, with shareholders receiving equivalent shares in both entities.”
Chandrasekaran expressed confidence in the future of Tata Motors’ resilience amid emerging global headwinds. “We remain vigilant to worldwide volatility, including the impact of changes in global trade conditions and the varying degrees of adoption of electric vehicles across different markets and evolving technologies, to accelerate our production plans while delivering value to our customers,” he said.
He informed that the company commenced work on their new manufacturing facility in Tamil Nadu, laying the foundation for future growth.
FY25 was a challenging year for Tata Motors. The company’s commercial vehicle sales fell 5.1% year on year to 384,704 units in FY25 and passenger vehicle sales declined 3% to 556,367 units. JLR volume stood flat at 400,898 units.
Shailesh Chandra, Managing Director of Tata Motors Passenger Vehicles, said that the forthcoming demerger will be a significant milestone in the company's journey, unlocking enhanced focus, agility and value creation across its businesses.
“This strategic move will empower each entity to pursue its own growth trajectory, driven by greater customer orientation and innovation. Tata Motors Passenger Vehicles is well‑positioned to capitalise on this shift, with a robust pipeline of exciting product launches across both EV and ICE segments,” stated Chandra.