Auto focus

Tata Motors and Mahindra face the heat, too

| Updated on April 09, 2020 Published on April 09, 2020

Opt for business spin-offs, freeze on investments

Two prominent Indian auto brands have had to recast business priorities as a result of Covid-19.

Tata Motors was the first to announce recently that it was planning to hive off its passenger car business. Speculation is rife that the partner could be Chery of China, with whom talks have apparently been going on for some months now.

There has been no confirmation on this news but the spinoff of the car business marks an acceptance of market realties that the company cannot stand on its own. “Over the last few years, the passenger vehicle business has implemented a strong turnaround…however, the recent outbreak of Covid-19 virus increases the challenges faced by the business,” said a press release.

Doubtless, there have been some remarkable initiatives in the form of legacy brands like the Indica and Nano followed by new generation products like Nexon, Harrier and Altroz. Despite this, Tata Motors has just not been able to make much headway in a market dominated by Maruti and Hyundai.

In the case of Mahindra & Mahindra, its board decided to cap investments in SsangYong Motor of South Korea, which it had acquired nearly a decade ago. Despite its best efforts, the company continues to struggle and it just made little sense perhaps to throw good money after bad.

However, the board has authorised the M&M management to consider a special one-time infusion of up to $32 million over the next three months to ensure some continuity in the brand’s business operations.

It now remains to be seen whether this is enough to sustain SsangYong. It does not occupy the pride of place in Korea as a brand like Hyundai. Its former owner, SAIC of China, could not keep it going and there is now only so much that Mahindra can do. Whether SaangYong will go the Daewoo way is a million dollar question but survival will not be easy in the post-Covid 19 world.

Published on April 09, 2020

A letter from the Editor


Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Sincerely,

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.