Tata Motor’s Racemo project along with stakes in other group companies is reportedly up for sale in order to raise funds.
The carmaker has also written off a working capital of Rs 1,641 crore from some of the vehicle projects. Of the total amount written off, about 60 per cent is from Tata Motors, while the rest is from Jaguar Land Rover. The carmaker has not revealed any specific date for the sale or the timeline for the sale proceedings. However, the sale process includes selling off TAL Manufacturing Solutions and parts of its defence business which has already begun. The company is also wrapping up the businesses of Tata Hispano and Tata Precision Industries. On the other hand, JLR will continue to receive an investment of 4.5 billion pounds (approx. Rs 450 crores) in this financial year.
The company spokesperson has said the shelving of working capital is a one-time feature and won't recur. "Significant disruptions in the auto industry necessitating a review of our product development costs capitalisation policy. One time charges taken for those projects that are not being taken forward for affordability check," the company said in a statement.
When announcing the shelving of the Tamo Racemo project, the carmaker also stated that they are going through a turnaround phase focusing on cost reduction. The Mumbai-based carmaker also came to realise that this premium product won’t be able to see the expected success in the country yet and hence, may not be worth the huge investment. Tata had admitted that their future product plans are being reviewed as well.
