Tata Motors can look at multiple synergies with Iveco: MD Girish Wagh

Girish Wagh, MD and CEO, Tata Motors

After getting listed earlier this week, Tata Motors for the first time reported its quarterly financial performance for the September quarter. Its reported profits were adversely impacted by mark to market loss of Rs 2,026 crore on account of recently listed Tata Capital leading to a loss of Rs 552 crore and net loss of Rs 868 crore. Excluding this item its profit before tax stood at Rs 1,474 crore.

Girish Wagh, Tata Motors managing director and CEO, explains below the advantages of demerging the commercial vehicles business from passenger vehicles while providing an update on the buyout of Italy’s truck maker Iveco. Edited excerpts:

What change has the GST rate reduction brought to demand?

The reduction in GST has called for higher freight movement through roads. This will cascade to high demand and therefore we expect a higher single-digit growth in demand in the second half of the year.

What synergies with Iveco is Tata Motors looking at?

We are looking at synergistic opportunities in the areas of revenue growth wherein we can look at each other’s products for different markets. We are looking at synergistic opportunities in capital expenditure wherein we can either share technologies or if we are chasing similar programmes.

Can there be synergies in operating expenditures?

There can be synergies in operating expenditures (opex) also where we can look at reducing cost and opex. The regulatory approvals are progressing very well and we seem to be on track to get this completed by April 2026.

How is Tata Motors dealing with the upcoming CAFÉ norms?

The industry has been able to arrive at a consensus on the corporate average fuel efficiency (CAFÉ) norms, which will get implemented in April 2027. This is for both medium and heavy commercial vehicles (MHCV) segment and on light commercial vehicles (LCV) segment.

Have the recommendations been different for the two segments?

In MHCV segment, the industry body Society of Indian Automobile Manufacturers has recommended to Bureau of Energy Efficiency and Ministry of Road Transport and Highways that instead of opting for constant speed fuel consumption norms and reduction as per that criteria, it should go for Bharat Vecto.

What is Bharat Vecto?

Bharat Vecto is a vehicle energy consumption tool which is a real-life representation of what can kind of fuel is getting consumed and what CO2 is getting emitted and this is the proposal that has been given to the government agencies and we are sure that it will be looked upon favourably.

What about light commercial vehicles?

For the light commercial vehicles and below the industry has been able to come to a consensus. The fuel consumption in this segment as a percentage of total fuel consumption in the country is less than 2% and the CO2 emission as a percentage is less than 1% therefore is was request for exemption for this N1 category from the CAFÉ norms.

What advantages will the demerger from the passenger vehicle division bring to the company?

This demerger will allow for a sharper focus on the commercial vehicle business, on the CV value chain and the road logistics value chain. The business will be empowered to look at all the opportunities favorably and explore those which can be value accretive for all stakeholders. Capex will remain between 2-4% of revenue and it will continue.