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The Tata acquisition of Jaguar Land Rover is a superb example to include in research notes on takeovers and mergers. At the time (early 2008), Tata’s investment in JLR seemed to be poorly timed and there were many critics who questioned the strategic logic of the move as well as its timing. Shortly after the takeover, demand in the global market for luxury cars collapsed as a result of the financial crisis and Tata was forced to refinance to support its investment. Several years later, however, the takeover appears to be a compelling example of a successful acquisition which is generating substantial shareholder value for Tata as well as continued support from JLR’s many stakeholder groups in the UK. Background Jaguar Land Rover (JLR):
Jaguar Cars since December 2012 officially incorporated as Jaguar Land Rover Ltd, is a British multinational car manufacturer headquartered in Whitley, Coventry, England, owned by Jaguar Land Rover Automotive PLC, a subsidiary of Indian automaker, the Tata Motors company. Jaguar was founded as the Swallow Sidecar Company by Sir William Lyons in 1922, originally making motorcycle sidecars before developing passenger cars. The name was changed to Jaguar after World War II to avoid the unfavourable connotations of the SS initials. Following sale to The British Motor Corporation in 1968—which merged with Leyland Motor Corporation and was later nationalised as British Leyland—Jaguar was listed on the London Stock Exchange in 1984, and became a constituent of the FTSE 100 Index until it was acquired by Ford in 1990. Jaguar has, in recent years, manufactured cars for the British Prime Minister, the most recent delivery being an XJ in May 2010. The company also holds royal warrants from HM Queen Elizabeth II and HRH Prince Charles.
. Tata Communications and Taj Hotels.However.Land Rover bought by Ford from BMW for $1. Tata Motors has auto manufacturing and assembly plants in Jamshedpur. Tata Motors Limited (formerly TELCO) is an Indian multinational automotive manufacturing company headquartered in Mumbai. India and a subsidiary of the Tata Group. India. Thailand and the United Kingdom.Jaguar fell into heavy losses whilst owned by Ford (reaching up to $600million per year) . Titan Industries. consumer products and chemicals. Tata Group was founded in 1868 by Jamsetji Tata as a trading company. Tata Consultancy Services (TCS). It is the world's eighteenth-largest motor vehicle manufacturing company.Jaguar Cars bought by Ford in 1989 . Sanand. and in Argentina. Tata Teleservices. The major Tata companies are Tata Steel. It encompasses seven business sectors: communications and information technology. Tata Chemicals. Lucknow . Maharashtra. It has research and development centres in Pune. buses and military vehicles. Ford invested heavily in new model development Tata Group: Tata Group is an Indian multinational conglomerate company headquartered in Mumbai. materials. Tata Group has over 100 operating companies each of them operates independently out of them 32 are publicly listed. Tata Global Beverages. India. Lucknow. Dharwad and Pune. engineering. Its products include passenger cars. Tata receives more than 58% of its revenue from outside India. energy. and are manufactured in Jaguar's Castle Bromwich assembly plant near Birmingham.4bn in 1989 .A difficult relationship between the UK firm and its US owners . coaches. Jamshedpur. trucks. Maharashtra.88 billion as of March 2012. Pantnagar. vans. Tata Power. fourthlargest truck manufacturer and second-largest bus manufacturer by volume. Tata Motors. services. It has operations in more than 80 countries across six continents. South Africa.Jaguar cars today are designed in Jaguar Land Rover's engineering centres at the Whitley plant in Coventry and at their Gaydon site in Warwickshire. The combined market capitalisation of all the 32 listed Tata companies was $89.
Tata Motors is ranked 314th in the 2012 Fortune Global 500 ranking of the world's biggest corporations. but struggling with a poor image and hampered by rising raw material costs The Deal .Ford sells JLR to Tata for in March 2008 just over £1bn . and the United Kingdom. .  Tata Motors entered the passenger vehicle market in 1991 with the launch of the Tata Sierra and in 1998 launched the first fully indigenous Indian passenger car.The price paid by Tata was approximately half of what Ford paid to buy Jaguar and Land Rover.A.. Telcon Construction Solutions. Spain. India. Founded in 1945 as a manufacturer of locomotives.Bought Corus Steel .just a few months before a collapse in global demand in the international car market .and Dharwad. + Ford had continued to incur heavy losses in Jaguar as it failed to turn the business around.One of India’s largest private conglomerates . Tata Motors acquired the South Korean truck manufacturer Daewoo Commercial Vehicles Company in 2004 and the British premium car maker Jaguar Land Rover in 2008.. the Indica. It has a bus manufacturing joint venture with Marcopolo S. which ended in 1969. the National Stock Exchange of India and the New York Stock Exchange. and in South Korea. and a construction equipment manufacturing joint venture with Hitachi.in 2007 .used to investing in the UK .Tata Motors . where it is a constituent of the BSE SENSEX index. Tata Marcopolo. Tata Motors is listed on the Bombay Stock Exchange.a big supplier to JLR .was already India’s third largest car-maker. the company manufactured its first commercial vehicle in 1954 in a collaboration with Daimler-Benz AG.Tata financed the takeover with $3bn of new long-term loans . .Bought Tetley Tea in 2000 .
WEAKNESSES • The company's passenger car products are based upon 3rd and 4th generation platforms. and the companies have an agreement to build a pick-up targeted at Central and South America. Indian market. which put Tata Motors Limited at a disadvantage with competing car manufacturers. • Despite buying the Jaguar and Land Rover brands (see opportunities below). SWOT ANALYSIS . For example after the Daewoo acquisition the Indian company leaned work discipline and how to get the final product 'right first time. Is the brand associated with commercial vehicles and low-cost passenger cars to the extent that it has isolated itself from lucrative segments in a more aspiring India? .' • The company has a strategy in place for the next stage of its expansion. which secured a commitment from Tata to continue with JLR’s production plans until the end of 2011. .No significant change proposed to the businesses by Tata. . and employs in excess of 23.which may have helped with the post-merger integration. STRENGTHS • The internationalisation strategy so far has been to keep local managers in new acquisitions. but it also has a programme of intensive management development in place in order to establish its leaders for tomorrow. It manufactures commercial and passenger vehicles.TATA MOTORS LIMITED The company began in 1945 and has produced more than 4 million vehicles. This SWOT analysis is about Tata Motors.000 people.The deal has been endorsed by trade unions. Not only is it focusing upon new products and acquisitions.The deal took over a year to agree . the Fiat Palio Style was launched by Tata in 2007. This includes development of new models. Tata Motors Limited is the largest car producer in India. This has enhanced the product portfolio for Tata and Fiat in terms of production and knowledge exchange. Tata recognised that it would continue to need support from Ford who are a main supplier of car components to the two brands. They claimed that staff. • The company has had a successful alliance with Italian mass producer Fiat since 2006. and to only transplant a couple of senior managers from India into the new market. The benefit is that Tata has been able to exchange expertise.. For example. Tata has not got a foothold in the luxury car segment in its domestic. trade unions and the UK government had been kept informed about the proposed takeover and supported the move.
OPPORTUNITIES • In the summer of 2008 Tata Motor's announced that it had successfully purchased the Land Rover and Jaguar brands from Ford Motors for UK £2. Again. The bus has optional organic clutch with booster assist and better air intakes that will reduce fuel consumption by up to 10%.• One weakness which is often not recognised is that in English the word 'tat' means rubbish. Would the brand sensitive British consumer ever buy into such a brand? Maybe not. Jaguar and Land Rover (see opportunities and strengths). is now the right time to move into this segment? The answer to this question (and the one above) is that new and emerging industrial nations such as India. • Sustainability and environmentalism could mean extra costs for this low-cost producer. and will undoubtedly off the company the chance to market vehicles in the luxury segments. at a time when the World is looking for environmentally friendly transport alternatives. • Since the company has focused upon the commercial and small vehicle segments. Two of the World's luxury car brand have been added to its portfolio of brands. • • THREATS • Other competing car manufacturers have been in the passenger car business for 40. the new Land Rover and Jaguar models will cost up to 85 times more than a standard Nano! The new global track platform is about to be launched from its Korean (previously Daewoo) plant. Obviously.retailing at little more than a motorbike. 50 or more years. These are the opportunities. The range of Super Milo fuel efficient buses are powered by super-efficient. South Korea and China will have a thirst for low-cost passenger and commercial vehicles. ecofriendly engines. but they would buy into Fiat. • Tata Motors Limited acquired Daewoo Motor's Commercial vehicle business in 2004 for around USD $16 million. Therefore Tata Motors Limited has to catch up in terms of quality and lean production. • Nano is the cheapest car in the World .3 million. This could impact its underpinning competitive advantage. For example ICICI bank and DaimlerChrysler have invested in a new Pune-based plant which will build 5000 new Mercedes-Benz per annum. Whilst the World is getting ready for greener alternatives to gas-guzzlers. Honda and . as Tata globalises and buys into other brands this problem could be alleviated. it has left itself open to competition from overseas companies for the emerging Indian luxury segments. Other players developing luxury cars targeted at the Indian market include Ford. However the company has put in place a very proactive Corporate Social Responsibility (CSR) committee to address potential strategies that will make is operations more sustainable. is the Nano the answer in terms of concept or brand? Incidentally.
Space. Jaguar XJ Brands 3.. > Born to perform. Many of Tata's products run on Diesel fuel which is becoming expensive globally and within its traditional home market. Don't dream it. Jaguar XK 2. • Rising prices in the global economy could pose a threat to Tata Motors Limited on a couple of fronts. Ford and others.. Grace. General Motors. Pace. SWOT :JAGUAR < Isuzu Motors. Unleash a Jaguar. Premium luxury car with sport features and high performance . Drive it. grace and luxury Jaguar-The art of performance.Toyota.Jaguar XF Ultra premium luxury automobile segment Rich businessmen and Royal families A car full of performance. Tagline/ Slogan USP STP Segment Target Group Positioning Product Portfolio 1. In fact the entire Indian market has become a target for other global competitors including Maruti Udyog. Jaguar Parent Company Category Sector Tata Motors Premium Luxury Cars Automobiles Jaguar XF. The price of steel and aluminium is increasing putting pressure on the costs of production.
High product Quality. Upgraded distribution channels specially in the emerging economies 4. Competitors 5. car design is criticized Weakness 3. Lack a variety product range as compared to competitors 2. Financial instability causes steep downfall in premium car Threats Competition segment 1. Popular Image of luxury value brand 3. Russia apart from USA and Europe Opportunity 2. After Tata acquisition cost cutting lead to labor union issues 1. Emerging economies like India. 5.SWOT Analysis 1. 2.Improvement in global sales after Tata Motors acquisition 1. Despite having high performance cars. Hybrid models of luxury cars is an untapped market 1. rich culture identity and strong global brand 2.Increase Strength Good.Bentley Aston Porsche Benz Martin . Strong competition from international automobile brands 2. Dependence on government policies and rising fuel prices 3. China. in crisp Research and quality development advertising spending 6.Mercedes 3.Audi 4.
JLR arm saw sales rise 37%.Key drivers of / motives for the takeover . China overtakes the UK as JLR’s biggest market.Acquiring JLR would provide significant potential for revenue synergies.focused on new product development & new equipment at JLR three UK plants + investment in a planned factory in China.000 of its new Range Rover Evoque. JLR also to link closer with Tata Steel to provide new lightweight steel alloys for new car models. India and Brazil.Tata gains access to world-class engineering capability . helped by selling 32. Tata Motors' shares are up over 70% . March 2012: JLR and Chery Automobile agree a joint venture that should pave the way for production of Jaguar and Land Rover cars in China. Tata had to refinance in order to keep JLR solvent. April 2012: JLR announces that it will build a successor to its previous sports cars called the F-type at its factory in Birmingham. The world is still getting used to the fact that Jaguar is now an Indian brand. Russia. including giving Tata greater international distribution. Related news:forbes For Tata Motors. Jaguar A Gold Mine A Jaguar XF from Tata Motors. broader product range and better customer service skills . November 2011: JLR announces 1.Strengthens relationship between Tata’s steel and motoring businesses What happened next? Significant slump in new car sales in late 2008 as a result of the credit crunch. February 2012: Soaring sales of Jaguar and Land Rover cars have helped Indian firm Tata Motors to a huge rise in profits (up 41% on 2010).000 new jobs a Land Rover plant in Solihull boosted by rising demand for SUVs in China. indicating the strategic importance of JLR to the UK economy February 2010: Tata secures a £340million loan from the European Investment Bank to support JLR through recession May 2011: Tata announces £5b five year investment programme in JLR . And thanks to the luxury car market. UK government considered a financial aid package.
It’s up a whopping 76% compared to second placed Toyota (TM) at 23% and third placed General Motors (GM) which is up around 19% year to date ending April 18. The two national cultures appear to fit together very well and Tata is being very respectful about what we are doing. period. of course.” Peter Marsh (FT) “The integration between the UK vehicle brands and Tata Motors. where interest rates and fuel prices have dented consumer confidence. Jaguar and Land Rover are worth $14 billion. recorded their highest ever monthly sales in March. the company said. both developed market power house brands. Bloomberg noted. the business plan has decidedly searched for new markets in oligarch rich Russia and. (Photo credit: Wikipedia) Little did Tata Motors (TTM) know that when it bought Jaguar in 2009 for a few billion dollars it would eventually help the India auto maker become one of the world’s hottest performing auto stocks. making it one of the best performing large cap stocks in the world. It also brings them up to a completely different level in terms of being a global passenger car company.” Ian Callum (Director of Design. Moreover. making the names worth more than Fiat and Suzuki Motors. the passenger vehicles it sells in India. Actually. where the GM brand still reigns supreme. and is beginning development of a new Jaguar sports car for later next year. Tata Motors is by far the-best performing major auto maker stock this year. both acquired by Tata from their Anglo-American roots back in ’09. Tata has since introduced new Jag models including the new XJ sedan. China. according to the average estimate of three analysts surveyed by Bloomberg. The luxury brands have plugged the holes in Tata’s core business. Jaguar): 2008 “We have shown Tata our new model lines and the planned product cycle. the Land Rover Evoque compact SUV and the Jaguar XF.year to date. make that one of the hottest performing stocks. Bloomberg newswires noted on Wednesday that the stock extended its gains after Jaguar and Land Rover. the Indian company’s . Key quotes about the deal Investment analyst (FT) “This deal not only gives Tata Motors a complete design portfolio in terms of having luxury and value-for-money cars.
” TATA HELPS JAGUAR LAND ROVER RESTORE ITS LOST GLORY ITGD Bureau New Delhi Last Updated: February 21.automotive division. softly” approach characterised by Tata’s interest in maintaining the goodwill of existing managers and keeping most working practices intact. keeping their identities intact.” Alan Mulally (President and CEO of Ford) “Jaguar and Land Rover are terrific brands. and we will endeavour to preserve and build on their heritage and competitiveness. As part of the transaction. plus information technology.” Ratan Tata (Chairman of Tata) We are very pleased at the prospect of Jaguar and Land Rover being a significant part of our automotive business. Ford will continue to supply Jaguar Land Rover with key components. accounting and other services. We have enormous respect for the two brands. We are confident that they are leaving our fold with the products. will be marked by a “softly. including research and development. while holding true to our principles of allowing the management and employees to bring their experience and expertise to bear on the growth of the business. We aim to support their growth. plans and team to continue to thrive under Tata’s stewardship. 2011 | 12:23 IST . Ford has also committed to provide engineering support.
a triumph of British engineering and entrepreneurship.5 billion pounds in 2008. The Birminghambased luxury car maker is once again what it was decades ago . has transformed Britain's most iconic luxury car brand . buying an expensive toy . the Mumbai-based conglomerate that also owns Tetley Tea and steelmaker Corus (now Tata Steel Europe).000 cars and had lost 280 million pounds. from a loss-maker to a winner. This was the fifth consecutive quarter of profits. But in the last three months of 2010 it made a profit of 275 million pounds. they said.theJaguar. The company had made just 167. Ford owned the company but they wanted . of an act of vanity when he bought JLR for 1.a world-renowned product that was long past its glory days. This success is an emphatic answer to the critics who accused Tata. under chairman Ratan Tata. For the first ten months it seemed as though the critics were right. Tata.a decision rescinded last November.In just over two years. Here was a successful Indian company. And most analysts believe that in three months' time JLR will be in a position to report a record one billion pounds profit. The turnaround is astonishing and is a welcome change to the 18 months of economic misery up to the end of 2009 when JLR announced 2. So how did this happen? Leading motor industry analyst Rob Golding said: "Three years ago Jaguar was unloved.500 redundancies and closure of one plant .
Post merger analysis of TATA and Jaguar . JLR's deputy chief finance officer. Now JLR is churning out a new range of highly popular Range Rovers.500 workers at Halewood in Liverpool and 1. "We are taking on workers now . said. It is understood that two models will be built in the China and the sales. Former BMW executive Ralf Speth was taken on as chief executive of JLR. Industry veteran and former boss of Opel Vauxhall. but the gamble by the unions to back Tata has paid off and JLR is hiring again. partly designed by Victoria Beckham.1. Freelanders and Jaguars such as the XF and XJ. Production has also started on a futuristic 'baby' Land Rover.000 cars. Even more importantly. was recruited at the beginning of 2010 as group chief executive at Tata Motors. Mardell said.000 two years after the deal. Carl-Peter Forster." While Ford may not have given its time to JLR. a company with strong connections to the Chinese government. but they make over a million each. talking to potential partners for JLR and the favourite is Chery Automobile. the company has taken the decision to build a 'green' baby Jaguar. sales to China increased by a staggering 95 per cent to 26.000 units in a couple of years. would satisfy demand in China. but there is no denying the fact that China is creating millions of rich middle class potential buyers of luxury brands. Last year.to get rid of it. the Evoque. at least it did not turn off the investment tap. "We are still a small firm compared with our rivals like Mercedes and BMW. which are expected to hit 40. Forster is in China this week. But now they have been given a sense of direction and management and designers have been allowed to get on with it. Inevitably it has taken top management changes to bring the company back to life." But the move that will cement JLR's fortunes is the new focus on China.000 engineers. We make just over 200.000 cars. Tata has a reputation for good industrial relations. Massive changes have been made and jobs have gone. and work on new models went ahead. Ford boss Alan Mulally wanted to concentrate on Ford and to get rid of the luxury cars. Adrian Mardell. Our workforce may yet get to 20. Forster has made it clear that JLR will remain in UK." Mardell is not keen to make predictions but it is safe to assume the company would like to be turning out more than 300.000.
Ford Motor Credit Company will provide financing for Jaguar and Land Rover dealers and customers during a transitional period. stampings and other vehicle components.” Tata appears to have secured technologies that it needs to improve its product line up in India. moreover. Much of the deal is funded with short term debt of $3 billion from Citigroup.000 on the factory floor.K. topping annual wages of more than $100. and then later expand it to the U.S. has agreed to keep the current employees and wages. Ford will provide financing for car sales at lease for a year. these technologies will help Tata to prepare its Indian operation as a global hub to sell cars to Europe. JP Morgan. Tata has either to lower operating cost by 30% to 40% or increase sales by . Unite. labor force intact. In addition. On this point Roger Maddison said. “As part of the transaction. was pleased to work with Tata and not with any other private equity fund controlled group. Tata needs Ford’s support for parts and technologies. several private equity funds in partnerships with various auto makers have attempted to purchase these brands but none was willing to keep the U. The sale ensures our members futures and we look forward to working with Tata..3 billion to Ford and Ford will contribute $600 million to the pension fund for the employees of Jaguar and Land Rover. Ford also has committed to provide engineering support. and a consortium of other banks. Hopefully. Ford in a press release said. However. Ford will not have any equity stake in the deal. Ford will continue to supply Jaguar Land Rover for differing periods with power trains. Supply agreements Ford and Tata will work together for years to come.. employee terms and conditions.” Does Tata know what is the root cause of lack of profits at Jaguar and does it have financial wherewithal to fund a string of losses is a question that should be asked. Africa. such as environmental and platform technologies. which can vary by market. including research and development. in a bid to acquire luxury brands. plus information technology. and sourcing agreements. Unsurprisingly. of up to 12 months. Apparently. Naturally. which looks increasingly difficult. Tata will have to quickly identify cost savings or increase sales in Europe and the U. the union representing factory workers in the U. the Middle East. including pensions.S. Tata.After eight months of negotiations Ford Motor Company and Tata Group have agreed on the sale of Jaguar and Land Rover brands. Interestingly. Moreover. accounting and other services.K. in addition to a variety of technologies. Deal terms Tata will pay $2. “Unite has secured written guarantees for all five UK plants on staffing levels. High employee costs UK wages at Jaguar and Land Rover are one of the highest in the world.
Unfortunately. a debtfunded purchase and high labor costs may take decades for the deal to work. operating cost. Moreover. the luxury market is competitive. Tata may find that keeping most of the production in U. however.S. Tata expects that Jaguar and Land Rover brand purchases will help to catapult it on the technology curve and gain prestige in the marketplace that it lacks. which Ford previously learned painfully. This has resulted in the company trailing its Chinese competitors in technology and automotive knowhow. .50% to 70% to turn Jaguar around. based in the U. promoted by then chief executive Jacques Nasser to build a collection of luxury brands. However. Ford. Tata lacks experience and financial wherewithal in designing new products. and driven by new products. Tata has been producing trucks in India for decades but its track record with cars has been spotty. and around the world.5 billion and Land Rover for $2. Because of this. for $2. In addition. Tata Group has recently launched its plan to sell world’s cheapest car for $2. volatile. included Austin Martin. which significantly lags to workers in Japan and Germany. moreover. under Ford. These quality problems have dodged Tata and the company is perceived in the local market as bureaucratic. Jaguar. Since neither goal is achievable in the next three years.K. More important. after losing market share in the face of stiff competition from Asian and European manufacturers.. difficult in a weakening economic environment.75 billion in 2000. Long term challenges If Tata fails to improve productivity in the long term within the U. Ford sale provides a cushion Ford Motor Company has declared a string of losses in recent years and the financial situation has become precarious. and persistent quality lag have been key reasons why Ford has done poorly in the last ten years. and this will strain that already difficult situation further. In 1989. Industry analysts have estimated that Ford has invested nearly $15 billion in the last fifteen years in Jaguar but has only seen widening losses and persistent quality problems. Tata has failed to use its India hub to challenge Japanese or Korean companies in the global markets.500 in India. the consequences may be dire. More troubling. Ford’s vision. Ford purchased Volvo in 1999 and Aston Martin in 1987. Tata is known for its mediocre trucks and came close to near bankruptcy in the early nineties. global markets for luxury cars are already crowded because of the current slowdown in international economic growth. how is Tata going to make Jaguar work? This question needs serious pondering. Now. The high labor. Ford has targeted to become profitable in its North American division in 2009 and expects to lower costs by $5 billion in that division in 2008. Ford purchased Jaguar. For instance. and Land Rover.K. is forced to lower its operating cost and sell assets.K. Volvo. has seen a decline in market share in the U.. Jaguar.
S.000 units worldwide. the third largest U. Land Rover has been successful as consumers increasingly embraced sports utility vehicles in the U. the Ford image of mass marketer has not helped the Jaguar brand either. Jaguar suffered from decisions to change its style and use Ford parts from other cheaper cars at the company. however. while Land Rover sales in 2007 were 227.S. at the time of Jaguar purchase. in the last five years. aimed to sell 200. What the future may bring for Tata and Jaguar . has drained capital and distracted management for years. Jaguar.S. suffered a similar fate after a severe miscalculation by Daimler management. sales under Ford have only declined. the losses at Ford North American operations only added pressure to under invest in the brand that is losing money. sales of Land Rover have increased from 26. Daimler was lucky and finally sold an 80% stake in Chrysler for $7. the Jaguar brand has consistently lagged in the marketplace.The Premier Automotive Group was formed to manage these brands of luxury cars. Additionally. the declining sales reflect the market’s displeasure with the brand.000 in 2002.4 billion to a private equity group Cerberus. The U. Moreover. had invested at least $3 billion in Land Rover to improve quality of cars. unfortunately. In addition. U. Jaguar 2007 sales have declined to 60. which was originally purchased only nine years ago at $37 billion. automaker when purchased by Daimler Benz. Similarly. this never happened.000.000 at Jaguar and Land Rover. appears to be overstaffed and may have to be trimmed by half if sales do not improve in the next three years.K. which never materialized. In relation.000 from 130.S. however. labor force of 16. one of the most coveted brands by Ford management. this ended miserably in 2007. by purchasing Chrysler. Unfortunately.000 in 2000 to an estimate of 46. Ford. Further. Moreover. by international standards. Ford. Daimler attempted to expand in the U. two different management cultures in Germany and Detroit failed to work together as their different priorities either attempted to cut costs or improve quality. This may be offset by rising fuel costs and a regulatory demand to lower vehicle weight and improve fuel efficiency. Daimler perceived several synergies between its Mercedes Benz luxury car and Chrysler division. The Chrysler fate Chrysler.000 in 2008. General Motors and BMW pursued similar paths with varying degrees of success.
However. Tata Group has been selling ‘software services’ through Tata Consultancy. How Tata is going to make Jaguar purchase work? This is a question that needs serious consideration. one can earn 6% a year with little financial risk and no operating headaches in the bond market. except in hotel services and perhaps in software manpower management. no one needs a reminder where Toyota and Honda are on the global stage today. additionally.Two questions that should be asked are: Does Tata know the root cause of lacking profits at Jaguar is and does it have a financial wherewithal to fund a string of losses? Likewise. a highly profitable company in the group. Ford knew this only too well when it sold both brands. Shareholders of Tata Group will be better served if that $3 billion of the Jaguar and Land Rover purchase was put to better use. A review of history will show that Tata. Honda and Toyota have reached at global dominance not by purchasing other failing companies. What's more. In conclusion. and Honda started making vehicles around the same time after World War II. but through continuous learning. The fact is that Tata has been making mediocre trucks for more than five decades in India and never managed sell them outside India in substantial volume. Tata Group has never achieved global quality excellence in any business that they have been operating in the last one century. innovation. it seems that Tata’s purchase of Jaguar and Land Rover is a vanity purchase shareholders of Tata Group can live without. there are other ways to accomplish this without spending $3 billion of borrowed money. Toyota. is a laggard not only on the global stage but in the domestic market. however. Tata either has to find ways to lower operating costs by 30% or increase sales by 50% to turn Jaguar around. Jaguar and Land Rover will not generate this level of return in the next five years and will have to fight with labor when the going gets inevitably rough. and constantly raising a bar on quality. Tata does not sell 10% of volume that Honda and Toyota each sell in the global markets. Yes. it had a brush with bankruptcy in the early nineties. Unfortunately. Tata Motors. neither goal is achievable in the next three years. After five decades. Interestingly. the profits of this company are funding the losses at many of the 98 companies of the group. one of the group’s companies that will integrate its domestic operations with the UK operations. there is talk of ‘Tata Way’. . which simply means Tata can run this operation without cutting staff while learning what Jaguar and Land Rover does well then applying this to operations in India.
indiatimes.com/news/news-by-company/corporatetrends/Tata-Motors-ride-JLR-to-top-Most-Valuable-Brands/articleshow/6812200.cms Forbes The economist Business standards .slideshare.net/expkarma/tata-j-l-rdealhttp://economictimes.References Magazines• • • News• The http://www.
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