Tata gets Jaguar & Land Rover for $2.3 billion

The Mumbai based Tata group has acquired Jaguar & Land Rover for $2.3 billion.

It took nine long months of tough negotiations for Tata Motors. But in the end they have acquired Jaguar and Land Rover from Ford, for less than half the price Ford paid to purchase Jaguar in 1989 and Land Rover from BMW in 2000.

Many are sceptical about Jaguar and Land Rover being owned by a mass manufacturer of trucks and passenger cars. But Tata has a clear vision for these premium brands.

Tata Chief, Ratan Tata said “We have enormous respect for the two brands and will endeavour to preserve and build on their heritage and competitiveness, keeping their identities intact.”

C Ramakrishnan, chief financial officer of Tata Motors, also said the two companies would be subsidiaries, so the assets of Land Rover and Jaguar will not be on Tata Motors’ books.

History is also on the side of Tata. Tata Motors’ Managing Director, Ravi Kant, has previously played a key role in integrating Daewoo into the Tata fold. He ensured that the Daewoo brand reigned supreme, the old management continued to run the show and that the group could leverage the technology for trucks in India.

Ford has assured Tata Motors of engineering support, including R&D, plus information technology, accounting and other services.

The deal will open the doors to vast technological advancements that both the brands have achieved over the years thanks to funding by Ford. Almost a billion dollars is invested every year as R&D for both the brands.

Tata Motors will eventually be able to trim the costs with the help of sisters companies like Tata Consultancy Services, Tata Technologies and Tata Auto Comp.

The technology sourced from Land Rover will also be used for Tata’s range of utility vehicles. Tata Motors has several plants around Pune which will eventually benefit from the technology transfer.

Overall this is not just the largest acquisition by an Indian company in the automobile business. It is also the best thing to happen to the Indian Automotive Industry. 

Interesting history about Jaguar and Land Rover.

Though it is considered the epitome of stylish performance today, Jaguar owes its origins to humble motorcycle sidecars. William Lyons’ Swallow Sidecar Company progressed to building special-bodied cars and the SS1 of 1931 set the stage for the first true Jaguar.

The Jaguar name came about in 1935. Reportedly, the SS name was dropped as it evoked the sinister Nazi SS.

Jaguar’s reputation of making some of the finest sports cars in the world began with the launch of the XK120 in 1948. With an unprecedented 160 bhp and svelte, good looks, the XK120 is one of the many Jaguars to make it to the history books.

Jaguar’s famous 3442cc inline-six was a jewel among engines. It won the manufacturer the Le Mans 24-hour race title five times, in 1951, 1953, 1955, 1956, 1957. Jaguar’s secret weapon to claim the title in 1953 with the C-Type was disc brakes, which they co-developed with Dunlop.

The spiritual successor to the seminal XK120 of 1948 was the visceral E-Type, launched in 1961 – arguably the most famous sports car of all time. Sixty per cent of the 70,000 E-Types produced were shipped to the US, where it was known as the XK-E.

The Jeep which Maurice Wilks used on his farm provided inspiration for another legend in the making. Maurice, the technical director of Rover, and his brother, Spencer Wilks, Rover’s managing director, sketched the outline of their vehicle in the sand of a Welsh beach in 1947 –the Land Rover was born.

Post-war rationing of steel meant the body panels used light aluminium ‘alloy’. Which turned out to be a good thing, as the Land Rover turned out to be rust-free!

The Land Rover is a true classic because it is still in production, beating even the Volkswagen Beetle. It has evolved over time but its fundamentals remain unchanged. Its Defender name, in use today, came about only in 1990.

Reportedly, three-fourths of all Land Rovers sold are still doing duty in various parts of the world.

Land Rover’s Discovery, introduced in the leisure market in 1989, was the first significantly new product since the luxurious Range Rover introduced in 1970.

Posted by Thomas Philip, www.AquariusITConsulting.com

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