MARCH 20249TOP STORIESTATA MOTORS TO DEMERGE INTO TWO INDEPENDENT ENTITIESOn Monday, Tata Motors' board gave the green light to a significant restructuring, opting to demerge its operations into two distinct entities: one focusing on commercial vehicles and the other on passenger vehicles. This strategic move aims to capitalize on synergies within each segment and drive accelerated growth.Under the proposed demerger, all shareholders of Tata Motors will maintain their current shareholding in both entities. This decision follows the earlier subsidization of PV and EV businesses in 2022, aligning with the company's strategy to enhance growth prospects and agility while reinforcing accountability.After the demerger, one entity will oversee the commercial vehicles business and associated investments, while the other will manage passenger vehicles, including PVs, electric vehicles, Jaguars, Land Rovers, and related investments. The demerger process will be executed through an NCLT scheme of arrangement, subject to approvals from the Tata Motors board, shareholders, creditors, and regulators, expected to be completed within 12-15 months.Since 2021, Tata Motors' CV, PV, and JLR businesses have operated independently under their respective CEOs. The rationale behind this move lies in the limited synergies between CV and PV businesses, although the company identifies significant synergies across all three, particularly in EVs, autonomous vehicles, and vehicle software. INDIA'S USED CAR MARKET ON TRAJECTORY TO HIT $100 BILLION: CARS24 CEOVikram Chopra, Co-Founder and CEO of CARS24 predicts that the Indian used car market will surge to reach the $100 billion milestone within the next decade. He attributes this growth projection to rising disposable incomes and the expanding middle class. According to a study conducted by the Gurugram-based online used car marketplace, there's a noticeable shift in market dynamics, with customers increasingly opting for frequent upgrades in their vehicles.Chopra highlights that the anticipated growth of the Indian used car market is expected to follow a 15 percent Compound Annual Growth Rate (CAGR), rising from $25 billion in 2023 to $100 billion by 2034. This growth trajectory is fueled by factors unique to the Indian market, including rapid urbanization and the evolving preferences of the middle class, which are driving demand for affordable mobility solutions.Reflecting on CARS24's journey over the past eight years, Chopra mentions that the used car market has experienced significant acceleration, with the market size growing from around $10-15 billion to its current state.Despite this growth, car ownership in India remains relatively low compared to developed countries like the US, China, and Europe. While 80-90 percent of the population in these regions own cars, only about 8 percent of Indians own a four-wheeler, indicating significant growth potential in the Indian market.
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