Ta Ta Jaguar
The European luxury brands have been a drag on Ford, which is focusing on a turnaround in its North American business. The company is getting $2.3 billion in the sale, but it is contributing $600 million to the Jaguar and Land Rover pension plans when the deal closes. That means Ford is netting roughly a third of what it paid for Jaguar (acquired in 1989) and Land Rover (in 2000).
For Tata, much has been written about how the deal marks a big global leap for the 139-year-old Indian conglomerate that began making cars just 10 years ago. Tata Group, a large steelmaker, has recently ventured into businesses like chemicals and luxury hotels. With the purchase of Jaguar and Land Rover, Tata Motors hopes to learn about marketing and selling in the West.
Some have questioned how Tata Motors can make what seems to be a bigger leap: from mass to class. Tata is best known for being the maker of the cheapest car in the world: the Nano, a 100,000 rupee ($2,500) 33-horsepower car, in India.
Still, if Jaguar and Land Rover can continue to retain their mystique and cachet while being made in Britain—and its history of failed automakers and sometimes shoddy manufacturing—then buyers shouldn't mind too much if their owners are now in Mumbai.
John Elliott on the Riding the Elephant blog on Fortune.com says that besides whether Tata can break the British auto industry's "cycle of decline," the other big question is what happens when Ratan Tata, the conglomerate's patriarch who is now 70, retires.
"It is Tata who has provided the personal drive and leadership to turn Tata Motors into a business that can produce the Nano and buy two world-famous brands in the same year. There's a big job waiting for someone—and Tata is not yet saying who."
After years of being unable to make a profit off Jaguar, Ford is trying to sell it. One of the interested buyers is Tata, a highly profitable Indian firm that runs several luxury brands including Taj hotels and Tetley Tea.
The TATA brand is a well-established brand in India. As you would know, the TATA group has a diversified portfolio of brands whether it be in the steel industry ( Corus, for example) or other industries such as automobiles, hotels etc. So, they know how to manage brands. Plus, they are a highly efficient group and have always been since their inception. The only difference is that they are now going global (though frankly, the Indian market itself provides ample scope). I would be surprised if the American public subscribed to the view of this gentleman. Rather, i believe that people will appreciate the core values that the TATA's live by, especially their work ethic. Assuming they strike the Jaguar deal, one would hope their efforts will maximise value for shareholders and help in growing the value and visibility of brand jaguar. Further, i must add that the gentleman's remarks show that even businessmen wear blinkers. Indian business talent, managerial skills etc have developed over decades (pre and post market-liberalisation)and therefore one finds Indians at the top rung in global companies(Citibank, Pepsi etc)and as successful entrepreneurs/businessmen(of course with great inputs in higher education from American universities and India's IIM's/IIT's). So, clearly, talent and ability to manage a brand/business is not the deficiency here. The deficiency arises out of warped ideas and perceptions which are relics of a Cold-War era when there was little Indo-US cultural (and business) exchange and the only reports newspapers carried of India were one of poverty, starvation, snake-charmers and elephants! Now, i wouldn't say it was all fake but i certainly feel that it was exaggerated. Actually,it was bound to be so, considering the complexity, variety and diversity of India and the fact that one can't generalise its people culturally or economically.
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