Mumbai: Carl-Peter Forster, group chief executive officer (CEO) and managing director of Tata Motors Ltd, resigned on Friday owing to “unavoidable personal circumstances”, the company said in a release.
Forster, 57, who earlier headed General Motors Co.’s Europe operations, joined Tata Motors in February 2010. His mandate at Tata Motors included managing its global operations, including Jaguar Land Rover (JLR), which was acquired in June 2008.
Prakash Telang, managing director of India operations, and Ralf Speth, CEO of JLR, will represent their respective units on the board.
“The board respects Carl-Peter’s personal circumstances that led to this move,” chairman Ratan Tata said in the release. Forster will continue to be associated with the company as a non-executive member of the board.
The resignation comes as the country’s largest auto maker by sales has been grappling with falling passenger vehicle sales, as have other Indian auto makers on account of rising interest rates and fuel prices amid economic uncertainty. Dragged down by the Nano, passenger car sales dropped 33% to 16,829 units in August from a year ago.
Forster’s resignation could have an impact on operations in the short term, said Umesh Karne, an analyst at brokerage Brics Securities Ltd.
“He had global experience, which would have come in handy with the company planning to expand in several geographies,” he said.
Sales of the Nano, reputed as India’s cheapest car, plunged 85% to 1,202 units over August 2010, even as the company broadened its effort to lift sagging volumes with initiatives that included more attractive finance schemes, discounts and better distribution.
Forster’s exit and Telang’s retirement next year could trigger key changes on Tata Motors’ board, according to a person familiar with the company. Ravi Pisharody, president of the commercial vehicles business, and C. Ramakrishnan, chief financial officer, are among those who may be inducted as directors, he said. Shyam Mani, managing director of Tata Motors Finance Ltd, the company’s vehicle financing arm, may also be in line to join the board. Mani may head the international operations of the company, the person added, on condition of anonymity.
Tata Motors’ spokesperson declined to comment.
“I deeply regret that my personal circumstances make it difficult for me to continue to perform the challenging duties of managing the thriving global activities of the Tata Motors group with its main activities in India and the UK and increasingly in additional overseas markets,” Forster said in the release. “I am glad to continue my association with Tata Motors.”
Tata Motors dropped 3.21% to Rs 763.60 on the Bombay Stock Exchange on Friday, while the bourse’s benchmark equity index, the Sensex, lost 1.74%. The statement was issued after market hours.