Tata Motors signed an MOU with the Tamil Nadu Government in March 2024. The new manufacturing unit will operate at the SIPCOT industrial estate in Panapakkam. SIPCOT Industrial Estate in Tamil Nadu has the ecosystem to deliver quality production. Pannapakkam is located in the Ranipet district of Vellore.
In recent times, the companies that have dominated the media space with takeover news are Tata, Ola, Vodafone India, and Reliance. The blog intrigues the readers with recent news and the professional hands operating behind this news. Take a tour with us to explore the corporate world. Tata Motors invested around nine crore for the new plant in Tamil Nadu. The investment marks Tamil Nadu as the automobile capital of India. TATA Motor is investing in Tamil Nadu for the first time. The company plans to divide the business into commercial vehicles and passenger vehicles. The blog information provides insight into the investment, acquisition and restructuring.
Investment:
The Tata Group Company entered into an MOU with Tamil Nadu government for the new plant. The new unit is the second plant of Tata Motors in southern India. The new company is creating 5,000 jobs. Manufacturing units have low and high-profile jobs. In general, the candidate with technical, non-technical and financial knowledge get suitable jobs in the manufacturing units. The Chief Minister of Tamil Nadu and authorities of Tata Motors have assembled to sign the MOU. The first big investment of Tata Motors was at Dharwad in Karnataka. In 2024, the Vietnam-based company VinFast is creating its footprint in India. VinFast Auto Ltd is a company established in the year 2017. It is a car brand with the production of electric vehicles. The company is planning to start production in India by mid of 2025. VinFast produces one seven-seat SUV and three types of five-seat SUV. The vehicles of VinFast are VF9, VF8, VF3 and VF6. The manufacturing of SUVs is a large segment of the existing market. The market prediction is that the SUV from Vinfast may dominate around ten per cent of the automobile market. The competition of Tata Motors production is with VinFast. The state Industries Minister TRB Raja said that it is a historic day and the investment enables growth to India. The state of Tamil Nadu works as the engine that enhances the growth of India. Tata Motors will decide on production after analysing the market trend. The Tamil Nadu plant would be the production point of either PV or CV. VinFast is the rival of Tesla. The company is planning to open its units in Toothukudi in Tamil Nadu.
In 2024, February, Tata Motors surpassed the market of Hyndai in the sales of passenger vehicles. The company is experiencing a growth of 20 per cent each year. Commercial vehicle sales are experiencing a decline of four per cent in the previous month. The market analysts say that in 2025, the CVs will have a downcycle. The demand in the commercial vehicle segment is cyclical. The producers experience three upcycles and two downcycles consecutively. Manufacturing companies plan their operations according to the upward and downward trend. Tamil Nadu has become an electronic export hub. The global players Apple, Foxconn, and Pegatron made the country an electronic hub.
Acquisition:
From 2017 to 2024, Tata Motors had made 12 acquisitions. The list of companies dealing with Tata Motors are GrocerMax, AirAsia, Dalda, Vsnl.com, Air India Express, B2C E-commerce, Tata 1mg, consumer digital India, and food and beverage products. Tata Motors has spent an amount of $1.37B to acquire other businesses. Tata Motors had a merger with Jaguar Rover and JLR. In 202, Tata Motors merged with Tinplate Company. In 2024, Tata Motors merged with Metaliks Limited.
Restructuring the business:
In a competitive world, businesses want to tap the business opportunities and reduce the cost through demerger and merger. Demerger is the concept of undertaking a merged company through the scheme of arrangement by the NCLT. Tata Motor announced on March 2024 that the Company will divide the entities into commercial vehicles and passenger vehicles. The passenger vehicles include the electric vehicles and JLR. The aforesaid units are operating as separate independent units under the guidance of different CEOs. From 2021 the three unit’s customer vehicle, passenger vehicle, electric vehicle and JLR are performing well. The restructuring plan offers the following merits.
- Restructuring offers opportunities to individual businesses.
- It increases the focus towards growth. The company focus more on electric vehicles, vehicle software development and autonomous vehicles.
- The new start-up companies focus on customer service and core production with collaboration.
- The merger offers a better experience to the customers and enhances the value of the investors.
- The ownership position of the shareholder is the same as before the demerger.
- The demerger is carried out as per the NCLT scheme.
- Tata Motors declared that the demerger will not affect the employees, business partners and customers adversely.
- The restructuring plan requires approval from the creditors, shareholders, and regulatory bodies. The approval process takes twelve to fifteen months. After the approval the restructure plan gets its final stage.
Cost audit of manufacturing units:
The audit committee in the companies suggest the names of the cost audit firms or cost accountants for the cost audit. Manufacturing units or service industries with a turnover of 35 crores and above must maintain the cost records. The companies are divided into two segments based on the nature of the business. The two types of companies are regulated and non-regulated sectors. Every company should update the Finance, audit, and cost-related records periodically. The companies update the financial information based on monthly, quarterly, annual and half-yearly performance. Companies calculate and maintain the cost calculations such as cost of production, margin money, and sales for each unit produced. Cost accountants have vast scope in the manufacturing units to plan the budget, restructure plans, and strategies, control cost and increase profitability.
Statutory audit of listed companies:
A listed company must conduct the statutory audit with the help of qualified chartered accountants and accounting firms. Big Four firms undertake the auditing of the listed companies. Statutory audit improves transparency, authenticity, and reputation, reduce risks, minimises errors, and corrects internal fraud activities.
Final Words:
Tata Motors’ new plan enhances opportunities, revenue and value to the professionals. The skills and infrastructure of the place attract investors to invest in the place. Tamil Nadu is the place of skilled professionals. RR Academy is happy to supply professionals to the growing demand of the corporate sector. The corporate news creates enthusiasm for students to pursue professional courses and contribute their specialised knowledge.
