Tata Motors has set the ball rolling to induct a foreign strategic partner in its India passenger vehicle business by transferring the unit to a wholly-owned subsidiary for Rs 9,417 crore.

The flagship of the Tata Group is in talks with multiple automakers, among them European and East Asian, to sell up to 49% stake in its India passenger vehicle business, which accounted for 4% (Rs 10,297 crore) of its turnover in fiscal 2020.

The move to bring in a strategic partner in the India car business comes 12 years after Tata Motors acquired Jaguar Land Rover (JLR) from Ford for $2.3 billion. The deal catapulted the Indian company into the club of the largest automotive players in the world. “The India passenger car business is something that we want to run and hence, we will not hand over majority control of the unit,” said a top official of Tata Motors.

The company has held talks with various Chinese players, including Geely, Changan, and Chery, which is a 50% partner in JLR’s China venture. The deteriorating relations between India and China has impacted deal-making, said a source close to the developments.

Tata Motors has also been conversation with a few others, including France’s PSA Group. But with PSA merging with Fiat Chrysler, things have slowed, sources said. Fiat Chrysler already has a manufacturing joint venture with Tata Motors in India. PSA, on the other hand, is making a re-entry into India with plans to launch its Citroen brand next year.

The subsidiary, TML Business Analytics Services—to be renamed Tata Motors Passenger Vehicles—will issue fresh shares to Tata Motors towards the Rs 9,417-crore payment. Once the India passenger car business is separated, Tata Motors will be left with the commercial vehicle business and investments in JLR and other subsidiaries. Tata Motors, which started as Telco in September 1945 with the manufacturing of boilers and locomotives, ventured into commercial vehicles in 1954 and, after more than three decades, got into making passenger cars.

A couple of years ago, Tata Motors and Volkswagen explored an alliance to develop an economy car, but it didn’t materialise. Whoever comes into TML Business Analytics is expected to bring a fresh lease of life to the struggling, loss-making passenger car business that also houses the electric vehicle unit. “Partnership is the future of our passenger vehicle business,” said the Tata Motors official quoted earlier.