Indian Owned - Jaguar... Land Rover
That's right, the deal was formally announced yesterday, 26 March 2008, that Tata Motors of India has acquired British marques Jaguar and Land Rover from Ford. Ford put up the two brands for sale so as to focus on its core business of making general purpose vehicles for its primarily US market. Ford continues to own Swedish marque Volvo and a significant stake in Japanese manufacturer Mazda.
Will Tata be able to do what Ford failed to and promote the brands to be profitable and competitive with their very successful German rivals? Time will tell... Its clear that it will be an uphill battle, Jaguar is unprofitable and Land Rover just managed to reach profitability in the past year, but if anyone can change things its got to be Tata.
Tata have pledged to retain production plants in the UK along with company staff and also have agreed to continue with the 5 year plans drafted by JLR (Jaguar, Land Rover) which run till 2011. My guess is that turnaround won't happen overnight, but in time the acquisitions may pay off. This is the motor industry and success of a company is mainly down to sales, and sales are driven by the product offering. If you can offer a product which is superior to the competition at the same price then the trajectory of the sales figures will gather vertical momentum.
A vehicle offering is judged by a number of categories, some of the key ones are:
> Performance
> Technology
> Design
> Reliability
> Value Retention
> Environmental Friendliness (increasingly important)
> Brand Name
On pondering over these areas its evident why Jaguar is not profitable.
> Performance have not been on par with German offerings.
> Technologically incomparable to German rivals (resulting in lower engine outputs, higher fuel consumption and interior gadgetry that's outdated).
> Design has not been bad but the classic trends have not been to everyone's tastes.
> Reliability hasn't been in the same league as the Germans/Japs.
> Value Retention the above factors result in the 2nd hand value dropping more than other marques.
> Jaguar do not make hybrid or smaller engined cars, and this is bad when it comes to the 'Enviro' rating.
> The Jaguar marque does have a history of producing luxury cars so this is one area they aren't suffering.
So Tata and Jaguar have quite a bit to do, some encouraging signs are that the latest offerings from Jaguar have modern appealing designs and appear to have improved in interior technology spec. The alliance with Tata may also help Jaguar when the new emissions laws get imposed in the west as Tata makes many small engined vehicles (the Tata Nano is the latest example) and if these are exported to the west then the overall 'Enviro' score may meet the requirements (other marques already use this technique to avoid penalties on their Luxury brands).
From this it can be seen that all is not gloomy and hence the reason for my quiet optimism. Either way it should be interesting to see if Tata's bold move pans out to be the stupid decision that'll have all the critics saying 'I told u so, anyone could have predicted it' or one that leaves them speechless.
