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  • TATA-JLR Deal - Profit or Loss?

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    Nitish Mishra
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    TATA acquired Jaguar Land Rover (JLR) in 2008, but according to a Morgan Stanley report, the deal resulted in losses for TATA, who had to invest an additional $1 billion in JLR on top of the original $2.3 billion purchase price. TATA also saw a 5% decrease in worldwide car sales and losses of over $1 billion from their Indian operations and JLR. However, if TATA had not acquired JLR, they would have missed an opportunity to enter the luxury car market and benefit from JLR's technology, and JLR's value likely would have increased as the global market recovered from recession.

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    TATA acquired Jaguar Land Rover (JLR) in 2008, but according to a Morgan Stanley report, the deal resulted in losses for TATA, who had to invest an additional $1 billion in JLR on top of the original $2.3 billion purchase price. TATA also saw a 5% decrease in worldwide car sales and losses of over $1 billion from their Indian operations and JLR. However, if TATA had not acquired JLR, they would have missed an opportunity to enter the luxury car market and benefit from JLR's technology, and JLR's value likely would have increased as the global market recovered from recession.

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    8 views1 page

    TATA-JLR Deal - Profit or Loss?

    Uploaded by

    Nitish Mishra
    TATA acquired Jaguar Land Rover (JLR) in 2008, but according to a Morgan Stanley report, the deal resulted in losses for TATA, who had to invest an additional $1 billion in JLR on top of the original $2.3 billion purchase price. TATA also saw a 5% decrease in worldwide car sales and losses of over $1 billion from their Indian operations and JLR. However, if TATA had not acquired JLR, they would have missed an opportunity to enter the luxury car market and benefit from JLR's technology, and JLR's value likely would have increased as the global market recovered from recession.

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    © All Rights Reserved
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    TATA- JLR deal--- Profit or Loss?

    As per Morgan Stanley’s report, this deal was a loss for TATA. They had to put in extra
    USD 1 billion as capital expenditure in JLR to go with USD 2.3 billion they had already
    given. Since they were investing a huge amount in TATA NANO project too, it was adding
    up to their costs as well. Their worldwide car sales also took a hit and decreased by 5 %.
    TATA lost USD 517 million in their Indian operations in March 2009 and lost additional
    USD 510 million on JLR.
    However, if TATA had not acquired JLR, they would not have been able to enter the luxury
    cars segment and they would have lost on amazing technology of JLR too. Moreover, sooner
    or later, global market would have risen from recession and value of JLR would have
    increased.

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