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A worker cleans a Tata Motors logo outside its showroom in the southern Indian city of Hyderabad October 26, 2009.

KRISHNENDU HALDER/REUTERS

Tata Motors said late on Friday its group Chief Executive Officer Carl-Peter Forster has resigned with immediate effect, only 18 months after joining the company.

Tata, India's leading maker of trucks and buses and owner of the luxury Jaguar and Land Rover brands, said Mr. Forster resigned due to "unavoidable personal circumstances," but will remain a non-executive member of the Tata Motors board.

Mr. Forster's exit comes as the Tata group continues to search for a successor to Ratan Tata, who is set to retire soon as chairman of the sprawling conglomerate. That search is taking longer than planned.

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Mr. Forster joined Tata in February 2010 after heading General Motors in Europe, with his focus firmly on turning around the loss-making Jaguar-Land Rover unit, which Tata bought from Ford Motor Co in 2008.

Mr. Forster succeeded in turning around the luxury unit, but sales of the Nano, launched to much fanfare as the world's cheapest car, have been disappointing.

"This is a bad development. When the overall market condition is so difficult, a change in leadership could have been avoided," said Vineet Hetamasaria, a sector analyst with brokerage PINC Research.

"He was doing a lot of things at JLR. The new person who will take his place will take time to understand the operations," he said.

Last month, Tata Motors posted flat profit in its fiscal first quarter, lagging estimates as higher costs squeezed margins, and said rising interest rates in Asia's third largest economy were a matter of concern.

The company, part of India's salt-to-software Tata conglomerate, makes passenger cars, including the ultra-cheap Nano, as well as utility vehicles.

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