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SRI SHARADA INSTITUTE OF INDIAN MANAGEMENT-RESEARCH

PROJECT ON

“Acquisition of Jaguar & land Rover By Tata Motors”

Sri Sharada Institute of Indian Management-Research 7, Institutional Area, Phase-II, Vasant Kunj, New Delhi -110070 Website : www.srisiim.org

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( 2010-2012 )

Submitted To: by: Prof. Harpreet Singh

Submitted Deepak Singh(108) H.R.Praveen(111)

DECLARATION
We,Deepak Singh, H.R. Praveen and Sanjeev Roy student of PGDM (201012) hereby declare that we have completed this project on “Acquisition of Jaguar & land Rover By Tata Motors” The information submitted is true to the best of our knowledge.

Deepak Singh H.R.Praveen Sanjeev Roy (PGDM 2010-12)

We have completed this study under the guidance and supervision of Prof.3 ACKNOWLEDGEMENT The “Acquisition of Jaguar & land Rover By Tata Motors” has been given to us as final Project (part of the curriculum in PGDM) We have tried our best to present this information as clearly as possible using basic terms that we hope will be comprehended by the widest spectrum of researchers.We would have failed in our duty if not acknowledge the esteemed scholarly guidance. assistance and knowledge received from them towards fruitful and timely completion of this work. Deepak Singh . Harpreet Singh. analysts and students for further studies.

and Fiat and successfully acquired Daewoo Commercial Vehicle Co. there were two most significant events which have had a momentous impact on the scale of the Company’s operations and its global image.. Tata Motors has experienced many joint ventures with Daimler Benz. Since its establishment in 1945.R.Praveen Sanjeev Roy Introduction Tata Motors is the largest multi-holding automobile company in India and it is the fourth largest truck producer in the world.4 H. In addition. Cummis Engine Co. with the revenues of US$ 8. A significant breakthrough for Tata was the development and commercialization of the truly Indian cars and they are Tata Indica (1998) and Tata Indigo (2002). passenger cars.8 billion in the financial year 2008. Tata Motors has grown significantly in the past 60years with the strategies of joint venture. In the year 2008. . Ltd. the two iconic British brand have made Tata Motors well known to the people in the world. acquisition and launched new products in different market segments (i. commercial vehicles and utility vehicles). Tata Motors is also the second largest bus producer in the world. the world cheapest car and the acquisition of Jaguar and Land Rover. The launching of Tata Nano.e. Inc.

Tata Power. and a shareholder base of 3. Tata companies employ over 425.000 people worldwide. to whom it is answerable. besides India. with delivery centres in the US. and Tata Motors is among the top five commercial vehicle manufacturers. The bridge loan of US$ 3 billion which used to fund the acquisition of JLR was due on June 2009 and yet at the end of the year 2008. services.3 billion (around Rs3. Hungary. Tata Chemicals is the world’s second-largest manufacturer of soda ash and Tata Communications is one of the . But it failed the expectation as the company was in trouble right after the acquisition of Jaguar and Land Rover (JLR) in June 2008 due to the arrival of global financial crisis. The major Tata companies are Tata Steel. Tata Motors. joint ventures and improvement and introduction of new products. Tata Consultancy Services (TCS).02 billion (as on February 2. Before we look into the reasons behind Tata Motors acquired JLR. it seems to have a promising future.5 Tata Motors has proven excellence over the years through continuous strong financial results. Each of these companies has its own board of directors and shareholders.6 million. Tata was only able to repay the US$ 1billion. Tata Global Beverages is the second-largest player in tea in the world. TCS is a leading global software company. was $83. UK. The Tata name has been respected in India for more than 140 years for its adherence to strong values and business ethics. The declining revenues and a tight credit conditions was hurting the company’s cash flow. There are 31 publicly listed Tata enterprises and they have a combined market capitalisation of about $89. energy. The questions arise is that whether Tata Motors able to repay the bridge loan? Will it be able to build up investors’ confidence and increase sales in the future? Could Tata Motors survive or going under bankruptcy? And we would analyze and discuss these further in the report. 2012). Tata Chemicals. Tata Steel is among the top ten steelmakers. engineering. materials. taken together. consumer products and chemicals. The total revenue of Tata companies. Tata Global Beverages. market expansion. Titan. Tata Group The Tata group comprises over 100 operating companies in seven business sectors: communications and information technology. acquisition. with 58 per cent of this coming from business outside India. Tata Communications and Indian Hotels. let us take a look on what makes Ford Motors to make the decision to sell JLR to Tata Motors. Uruguay and China. Every Tata company or enterprise operates independently. Brazil.796. Tata Teleservices. The group has operations in more than 80 countries across six continents. in the world. and its companies export products and services to 85 countries.75 billion) in 2010-11.

as is the Eka supercomputer (developed by another Tata company). USA. healthcare and livelihoods. hospitality and airlines. Tata’s early years were inspired by the spirit of nationalism.75 billion in 2011 and ranked it 41st among the world's 100 most valuable brands. the Tata promoter holding company. power.000 employees are guided by the vision to be ''best in the manner in which we operate. in 2009 rated it 11th on its list of the world's most reputable companies. best in the products we deliver. the Indica. Tata companies are building multinational businesses that will achieve growth through excellence and innovation. Tata Motors' presence indeed cuts across the length and breadth of India. The Nano car is one example. while balancing the interests of shareholders. social studies and the performing arts. Brand Finance.6 world’s largest wholesale voice carriers. . Tata companies also extend social welfare activities to communities around their industrial units. Tata Motors Profile Tata Motors Limited is India's largest automobile company. The company is the world's fourth largest truck manufacturer. It pioneered several industries of national importance in India: steel. valued the Tata brand at $15. Founded by Jamsetji Tata in 1868. The trusts also provide aid and assistance to non-government organisations working in the areas of education.23.133 crores (USD 27 billion) in 2010-11. and Tata Motors. Tata is focusing on new technologies and innovation to drive its business in India and internationally. midsize car and utility vehicle segments. BusinessWeek magazine ranked Tata 17th among the '50 Most Innovative Companies' list and the Reputation Institute. and among the top three in passenger vehicles with winning products in the compact. In tandem with the increasing international footprint of Tata companies. The combined development-related expenditure of the trusts and the companies amounts to around 3 per cent of the group's net profits in 2011. Anchored in India and wedded to traditional values and strong ethics. its pioneering spirit has been showcased by companies such as TCS. Tata companies have always believed in returning wealth to the society they serve. a UK-based consultancy firm. medical research. employees and civil society. The company's over 25. which in 2008 was ranked the world’s fourth fastest. Twothirds of the equity of Tata Sons. in 1998 and recently unveiled the world’s lowest-cost car. Over 6.'' Established in 1945. and best in our value system and ethics.5 million Tata vehicles ply on Indian roads. It is the leader in commercial vehicles in each segment. and the world's third largest bus manufacturer. India’s first software company. with consolidated revenues of INR 1. is held by philanthropic trusts that have created national institutions for science and technology. the Tata Nano. the Tata brand is also gaining international recognition. Going forward. since the first rolled out in 1954. which made India’s first indigenously developed car. In more recent times.

Tata Motors. Russia and South America. medium and heavy commercial vehicles ranging from 4 . The company's dealership. Africa. a business comprising the two iconic British brands that was acquired in 2008.500 touch points. Tata Motors also distributes and markets Fiat branded cars in India. Ukraine. light. Tata Motors entered into joint venture with Thonburi Automotive Assembly Plant Company of Thailand to manufacture and market the company's pickup vehicles in Thailand. Spain and South Africa. Pune (Maharashtra). Tata Motors is also expanding its international footprint. Tata Motors has operations in the UK. the Middle East. north of Pretoria. The foundation of the company's growth over the last 65 years is a deep understanding of economic stimuli and customer needs. South Korea's second largest truck maker. from semi knocked down (SKD) kits. and Senegal. has also emerged as an international automobile company.50 tonnes. a global leader in body-building for buses and coaches to manufacture fully-built buses and coaches for India and select international markets. and subsequently the remaining stake in 2009. while also exporting these products to several international markets. Tata Motors formed a joint venture with the Brazil-based Marcopolo. The plant can assemble. In 2006. sales.. JLR supports two state of the art engineering and design facilities and three manufacturing plants (Solihull. Among them is Jaguar Land Rover. the first company from India's engineering sector to be listed in the New York Stock Exchange (September 2004). Tata Motors acquired the Daewoo Commercial Vehicles Company. Hispano's presence is being expanded in other markets. and the ability to translate them into customer-desired . In 2004. a reputed Spanish bus and coach manufacturer. Sanand (Gujarat) and Dharwad (Karnataka). South Korea. The company's commercial and passenger vehicles are already being marketed in several countries in Europe. The rechristened Tata Daewoo Commercial Vehicles Company has launched several new products in the Korean market. established through exports since 1961. Today two-thirds of heavy commercial vehicle exports out of South Korea are from Tata Daewoo. South East Asia. In 2005..7 The company's manufacturing base in India is spread across Jamshedpur (Jharkhand). Tata Motors acquired a 21% stake in Hispano Carrocera. It has franchisee/joint venture assembly operations in Bangladesh. Lucknow (Uttar Pradesh). it has set up an industrial joint venture with Fiat Group Automobiles at Ranjangaon (Maharashtra) to produce both Fiat and Tata cars and Fiat powertrains. Thailand. Castle Bromwich & Halewood) in the UK. CIS. Following a strategic alliance with Fiat in 2005. South Asia. with the Xenon having been launched in Thailand in 2008. in the Gauteng province of South Africa. Pantnagar (Uttarakhand). Tata Motors' joint venture with Tata Africa Holding (Pty) Ltd. In 2006. services and spare parts network comprises over 3. Through subsidiaries and associate companies. Tata Motors (SA) (Proprietary) Ltd. The new plant of Tata Motors (Thailand) has begun production of the Xenon pickup truck. has its assembly plant in South Africa at Rosslyn.

as planned. construction equipment manufacturing. Tata Motors launched the Tata Aria. Through its subsidiaries. It has also been implementing several environment-friendly technologies in manufacturing processes.8 offerings through leading edge R&D. India's first indigenously developed mini-truck. The lean design strategy has helped minimise weight. Tata Motors ushered in a new era in the Indian automobile industry. machine tools and factory automation solutions. The Tata Aria redefines several benchmarks with its design and technologies. they will introduce new benchmarks in India and match the best in the world in performance at a lower life-cycle cost. it has a roomy passenger compartment with generous leg space and head room. Its mono-volume design will set a new benchmark among small cars. Lucknow. It can comfortably seat four persons. has enabled pioneering technologies and products. the Tata Nano. Jamshedpur. Within two years of launch. carrying capacity. high-precision . India's first fully indigenous passenger car. Tata Motors is equally focussed on environment-friendly technologies in emissions and alternative fuels. in keeping with its pioneering tradition. Spain. It has developed electric and hybrid vehicles both for personal and public transportation. Tata Motors unveiled its People's Car. which helps maximise performance per unit of energy consumed and delivers high fuel efficiency. Its safety performance exceeds regulatory requirements in India. which developed the first indigenously developed Light Commercial Vehicle. which signifies a first for the global automobile industry. and in South Korea. the first Indian four-wheel drive crossover. Tata Indica became India's largest selling car in its segment. automotive vehicle components manufacturing and supply chain activities. the Tata Indica. In terms of overall pollutants. The high fuel efficiency also ensures that the car has low carbon dioxide emissions. in India in March 2009. significantly enhancing resource conservation. Tata Motors created a new segment by launching the Tata Ace. Designed with a family in mind. In January 2008. by unveiling its new range of world standard trucks called Prima. With over 4. in 1998. In 2005. The company today has R&D centres in Pune. the company's Engineering Research Centre. it has a lower pollution level than two-wheelers being manufactured in India today. speed. the company is engaged in engineering and automotive solutions. the Nano brings the comfort and safety of a car within the reach of thousands of families. offering class leading features that take comfort and safety to a new height. In May 2009. India's first Sports Utility Vehicle and. which India and the world have been looking forward to. It was Tata Motors. thereby providing the twin benefits of an affordable transportation solution with a low carbon footprint. Its tailpipe emission performance too exceeds regulatory requirements. established in 1966. Dharwad in India. A development. In their power. operating economy and trims. The Tata Nano has been subsequently launched.500 engineers and scientists. In October 2010. and the UK.

powerful engine and aggressive marketing strategy made it one of the best selling cars in the history of the Indian automobile industry. The goal of environment protection is achieved through tree plantation. the first . Tata Motors acquired British Jaguar Land Rover (JLR). Tata launched the Indica in 1998. After the launch of three more vehicles. Expansion The 2nd generation Tata Indica V2's fuel economy. The company's support on education and employability is focused on youth and women. In health. Tata Motors is committed to improving the quality of life of communities by working on four thrust areas employability. Tata Estate (1992. Formed a joint venture with Marcopolo of Brazil and introduced low-floor buses in the Indian Market. ➢ In 2005.9 tooling and plastic and electronic components for automotive and computer applications. Tata Motors today is etching a refulgent future.85 million. our intervention is in both preventive and curative health care. health and environment. ➢ In 2007. ➢ In 2008. which includes the Daimler and Lanchester brand names. ➢ In 2010. a multi utility vehicle. With the foundation of its rich heritage. and automotive retailing and service operations. last but not the least. India's first sports utility vehicle). The acquisition is in line with the company’s objective to enhance its styling/design capabilities to global standards. conserving water and creating new water bodies and. They range from schools to technical education institutes to actual facilitation of income generation. education. now known as Tata Daewoo Commercial Vehicle. Tata Sumo (LCV. Tata Motors acquired 21% of Aragonese Hispano Carrocera giving it controlling rights of the company. a stationwagon design based on the earlier 'TataMobile' (1989). Acquisitions ➢ In 2004 Tata Motors acquired Daewoo's truck manufacturing unit. in South Korea. The activities touch the lives of more than a million citizens. by introducing appropriate technologies in our vehicles and operations for constantly enhancing environment care. After years of dominating the commercial vehicle market in India. a light commercial vehicle). 1994) and Tata Safari (1998. Tata Motors entered the passenger vehicle market in 1991 by launching the Tata Sierra. Tata Motors acquired 80% stake in Italy-based design and engineering company Trilix for a consideration of €1.

Pune. making it a fully owned subsidiary. powerful engine and aggressive marketing strategy made it one of the best selling cars in the history of the Indian automobile industry. Joint ventures Tata MarcoPolo released a low-floor bus in India and now it is widely used as public transport in Delhi.Main article: Hispano Carrocera In 2005. Since the domestic commercial vehicle sales of the company are at the mercy of the structural economic factors. Tata Motors has jointly worked with Tata Daewoo to develop trucks such as Novus and World Truck and buses namely. named Indica V2. Tata Daewoo Commercial VehicleMain article: Tata Daewoo Commercial Vehicle Tata Motors aimed to increase its presence worldwide. Hyderabad. Tata Motors has a high domestic exposure of ~94% in the MHCV segment and ~84% in the light commercial vehicle (LCV) segment. it acquired the Daewoo Commercial Vehicle Company of South Korea. the company picked up the remaining 79% stake in Hispano Carrocera SA for an undisclosed sum.10 fully indigenous passenger car of India. Chandigarh and Lucknow. A newer version of the car. Tata Motors also successfully exported large quantities of the car to South Africa. The company plans to diversify into various markets across the world in both MHCV as well as LCV segments. Mumbai. Tata plans to leverage on the strong presence of TDCV in the heavy-tonnage range and introduce products in India at an appropriate time. the car's excellent fuel economy. Though the car was initially panned by autoanalysts. it is increasingly looking at the international markets. The reasons behind the acquisition were: Company's global plans to reduce domestic exposure. . To expand the product portfolio Tata Motors recently introduced the 25MT GVW Tata Novus from Daewoo’s (South Korea) (TDCV) platform.the leading European bus and coach cabin maker. Chennai. In 2004. Tata remains India's largest heavy commercial vehicle manufacturer and Tata Daewoo is the 2nd largest heavy commercial vehicle manufacturer in South Korea. sensing an opportunity in the fully built bus segment. was a major improvement over the previous version and quickly became a mass-favorite. Bangalore. GloBus and StarBus. This was mainly to cater to the international market and also to cater to the domestic market where a major improvement in the Road infrastructure was done through the National Highway Development Project. Tata Motors acquired a 21% stake in Hispano Carrocera SA. The success of Indica in many ways marked the rise of Tata Motors. The domestic commercial vehicle market is highly cyclical in nature and prone to fluctuations in the domestic economy. Hispano Carrocera . In 2009.

Tata Nano Europa had been developed for sale in developed economies and it hit markets in 2010 while the normal Nano had hit markets in South Africa. Lucknow. By October 2005. Ace rapidly emerged as the first choice for transporters and single truck owners for city and rural transport. New Delhi. Tata Motors also formed a joint venture with Fiat and gained access to Fiat’s diesel engine technology. Gujarat and the first Nanos were rolled out in summer 2009. The mini-truck was a huge success in India with auto-analysts claiming that Ace had changed the dynamics of the light commercial vehicle (LCV) market in the country by creating a new market segment termed the small commercial vehicle (SCV) segment. Kenya and countries in Asia and Africa by late 2009.000 (US $3000). This joint venture is to manufacture and assemble fully built buses and coaches targeted at developing mass rapid transportation systems. and Marcopolo will provide knowhow in processes and systems for bodybuilding and bus body design. the least expensive production car in the world at about 120. Coimbatore. Tata has faced controversy over developing the Nano as some environmentalists are concerned that the launch of such a low-priced car could lead to mass motorization in India with adverse effects on pollution and global warming. Pune. The joint venture will absorb technology and expertise in chassis and aggregates from Tata Motors. Tata Ace-Main article: Tata Ace Tata Ace. Delhi. Kochin. was launched in May 2005. Important developments Tata Nano-Main article: Tata Nano In January 2008. The Ace was built with a load body produced by Autoline Industries. India's first indigenously developed sub-one ton mini-truck. . and is looking to extend its relationship with Fiat and Iveco to other segments. Tata Motors launched Tata Nano. Mumbai. Trivandrum and Bengaluru transport corporations. Ace is still a top seller for TML with 5 lakh units sold to date (June 2010). Autoline was producing 300 load bodies per day for Tata Motors. Tata had set up a factory in Sanand.The city car was unveiled during the Auto Expo 2008 exhibition in Pragati Maidan. LCV sales of Tata Motors had grown by 36.537 units due to the rising demand for Ace.11 Tata Motors has formed a 51:49 joint venture in bus body building with Marcopolo of Brazil. Tata and Marcopolo have launched a low-floor city bus which is widely used by Chennai. Its manufacturing facility is based in Dharwad.6 percent to 28.By 2005. A battery version is also planned. Tata Motors sells Fiat cars in India through a 50/50 joint venture Fiat Automobiles India Limited. Tata has also formed several JV's with many small companies in various countries around the world.

In December 2009 Tata's vice president of engineering systems confirmed that the limited range and low engine temperatures were causing difficulties.12 Ace has also been exported to several Asian. With full tanks it is said to run at 100 km/h (62 mph) for 90 kilometres (56 mi) range in urban cycle.Tata vehicles are sold primarily in India.In Sri Lanka it is sold through Diesel & Motor Engineering(DIMO) PLC under the name of DIMO Batta.1 cu ft) trunk. Operations This article appears to be written like an advertisement. Please help improve it by rewriting promotional content from a neutral point of view and removing any inappropriate external links. Pune (Maharashtra).Tata relies on its subsidiaries for sales outside India.84 billion) in 2007–08. Tata Xenon is Tata's bestselling vehicle in Europe. In 2007.48 crore (US$7. but "the compressed air driving the pistons can be boosted by a fuel burner". (May 2010)The Tata Safari DiCOR is one of Tata's best selling vehicles in India and also has been fairly successful in the Mediterranean and Eastern EuropeTata has tried to revamp all its models in order to satisfy the consumer. midsize car and utility vehicle segments.It is the leader in commercial vehicles in each segment. Compressed air car-Main article: Tata OneCAT Motor Development International of France has developed the world's first prototype of a compressed air car.There are no gasoline costs and no fossil fuel emissions from the vehicle when run in town. Lucknow (Uttar Pradesh). and over 4 million Tata vehicles have been produced domestically since the first Tata vehicle was assembled in 1954. and among the top three in passenger vehicles in India with products in the compact. It has airtanks that can be filled in 4 hours by plugging the car into a standard electrical plug. MDI owner Guy Negre was reported to have "the backing of Tata". Tata in India A loaded Tata truck on a Rajasthan highway Tata Motors Limited is India’s largest automobile company.651. The company’s manufacturing base in India is spread across Jamshedpur (Jharkhand). which would fill the tanks in 3 minutes. European. Seen here is the Range Rover Sport. Pantnagar (Uttarakhand) and Dharwad (Karnataka). In 2008 MDI planned to also design a gas station compressor. named OneCAT. OneCAT is a five seat vehicle with a 200-litre (7. There are severe physical arguments pleading against those figures. with revenues of 35. South American and African countries and all-electric models are sold through Chrysler's Global Electric Motorcars division. Tata set up an industrial joint venture with Fiat Group . The purchase of Jaguar and Land Rover is expected to help give Tata Motors gain a foothold in the European and American markets. Following a strategic alliance with Fiat in 2005.

South Korea’s second largest truck maker. Tata has a growing consumer base in Italy. Tata Motors acquired a 21% controlling stake in Hispano Carrocera. Tata has operations in the UK. In 2005.13 Automobiles at Ranjangaon (Maharashtra) to produce both Fiat and Tata cars and Fiat powertrains. In 2004. The company is establishing a new plant at Sanand (Gujarat). a Spanish bus and coach manufacturer. Lanchester and Rover brands.Tata Motors continued its market area expansion through the introduction of new products such as buses (Starbus & Globus. which also includes the Daimler. Tata's global operations Tata Motors has been in the process of acquiring foreign brands to increase its global presence. while also exporting these products to several international markets.Though Tata is present in many countries it has only managed to create a large consumer base in the Indian Subcontinent. Tata Motors reached an agreement with . Sri Lanka and Nepal. Today two-thirds of heavy commercial vehicle exports out of South Korea are from Tata Daewoo. Jaguar Cars and Land Rover After the acquisition of the British Jaguar Land Rover (JLR) business. Sales & Service Network-Tata Motors has more than 250 dealerships in more than 195 cities across 27 states and 4 Union Territories of India. South Korea. jointly developed with subsidiary Hispano Carrocera) and trucks (Novus.Tata Motors has expanded its production and assembly operations to several other countries including South Korea. In May. Ukraine. South Africa and Argentina and is planning to set up plants in Turkey. Tata acquired the Daewoo Commercial Vehicles Company. Tata also has franchisee/joint venture assembly operations in Kenya. a business comprising two struggling iconic British brands that was acquired from the Ford Motor Company in 2008. Tata Motors also distributes and markets Fiat branded cars in India. Spain and South Africa. Through acquisition. Indonesia and Eastern Europe. South Africa. the SAARC countries and the MiddleEast by the end of 2009 santhosh In 2006. jointly developed with subsidiary Tata Daewoo). Tata Motors became a major player in the international automobile market. Thailand and Spain. Bangladesh. Tata formed a joint venture with the Brazil-based Marcopolo to manufacture fully built buses and coaches for India and other international markets.It has the 3rd largest Sales and Service Network after Maruti Suzuki and Hyundai. Bangladesh. Russia and Senegal. sales. Bhutan. service and spare parts network comprises over 3500 touch points. Tata's dealership. Among these acquisitions is Jaguar Land Rover. 2009 Tata unveiled the Tata World Truck range jointly developed with Tata Daewoo Debuting in South Korea.Tata has dealerships in 26 countries across 4 continents. The re-branded Tata Daewoo Commercial Vehicles Company has launched several new products in the Korean market. namely India. Thailand. On 27 March 2008.

chief designer at the Rover Company. . which is essentially a 2. was built on a Jeep chassis. Tata Motors has also gained access to two design centres and two plants in UK. where Land Rovers were built under license and the engine was also used in Ford pick-up trucks built locally. The key acquisition would be of the intellectual property rights related to the technologies. Anglesey.5-litre four-cylinder 300TDiengined versions rather than the electronically controlled 2. on his farm in Newborough. It is said that he was inspired by an American World War II Jeep that he used one summer at his holiday home in Wales. This engine also continued in use in some export markets using units built at a Ford plant in Brazil. meaning that Land Rover no longer offers it as an option. The sale was completed on 2 June 2008. with a corresponding increase in power and torque. advertisements for Rovers cite vehicles driven thousands of miles on banana oil. All power is combined with an All-Terrain Traction Control which gives active terrain response.8-litre version of the 300TDi. such as the Series I.14 Ford to purchase their Jaguar Land Rover operations for US$2.8 TGV Power Torque. all models until recently feature sturdy box section ladder-frame chassis. The British Army maintains the use of the mechanically simple 2. so early vehicles only came in various shades of light green. Now with more complex service requirements this is less of an option. In addition to the brands. International Motors of Brazil offer an engine called the 2. Production of the TDi engine ended in the United Kingdom in 2006. Land Rover Profile History Land Rover Series I Land Rover Series IIa 88 The design for the original Land Rover vehicle was started in 1947 by Maurice Wilks. were field-tested at Long Bennington and designed to be field-serviced. The early choice of colour was dictated by military surplus supplies of aircraft cockpit paint. The early vehicles. Ferrari uses a similar system in race traction.The first Land Rover prototype.5-litre five-cylinder TD5 to retain some servicing simplicity.3 billion. later nicknamed 'Centre Steer'.

On 2 June 2008. Sale to Tata On 11 June 2007. had expressed interest in purchasing Jaguar Cars in August. A UKbased private equity firm. Before the sale was announced. as well as two dormant brands Lanchester and Rover. but the sale was delayed and an announcement was not made until March 2008. later British Leyland (BL) as Rover Triumph . On 26 March 2008. Ford Motor Company announced its plan to sell Land Rover. Timeline A Land Rover dealership in San Jose. chairman of British excavators manufacturer JCB.15 During its ownership by Ford. the year previously. Alchemy Partners. which he did not wish to buy. Ford retained the services of Goldman Sachs. along with Jaguar. Anthony Bamford. at which point it was re-acquired by the then Ford Motor Company owned Land Rover Limited. Land Rover was associated with Jaguar. The buyer was initially expected to be announced by September 2007.BMW and Ford had previously retained ownership of the Rover brand to protect the integrity of the Land Rover brand. the Rover brand was originally used under license by MG Rover until it collapsed in 2005. Morgan Stanley and HSBC to advise it on the details of the deal. with which 'Rover' might be confused in the US 4x4 market. the sale to Tata Motors was completed by both parties. and some models shared components and production facilities. In many countries they shared a common sales and distribution network (including shared dealerships). 1948. and that the sale was expected to be completed by the end of the second quarter of 2008. Ford announced that it had agreed to sell its Jaguar and Land Rover operations to Tata Motors. and the India-headquartered Tata Motors and Mahindra and Mahindra expressed interest in purchasing Jaguar and Land Rover from the Ford Motor Company. Tata Motors received endorsements from the Transport and General Workers' Union (TGWU)-Amicus combine and Ford as a preferred bidder. at the Amsterdam Motor Show ➢ 1958: Series II launched ➢ 1961: Series IIA began production ➢ 1967: Rover becomes part of Leyland Motors Ltd. California ➢ 1947: Rover's chief designer Maurice Wilks and his associates create a prototype for a new off-road vehicle ➢ 1948: The first Land Rover was officially launched the 30th April.Included in the deal were the rights to three other British brands: Jaguar's own Daimler. only to back out when told the sale would also involve Land Rover.

➢ 1997: Introduction of the Freelander ➢ 1998: Introduction of the second generation of Discovery ➢ 2000: BMW breaks up the Rover Group and sells Land Rover to Ford for £1. (The original Range Rover was continued under the name 'Range Rover Classic' until 1995) ➢ 1997: Land Rover introduces the Special Edition Discovery XD with AA Yellow paint. Introduction of second-generation Range Rover. Produced only for the North American market. Project Llama started ➢ 1988: Rover Group is privatised and becomes part of British Aerospace. and a few other off-road upgrades directly from the factory. publication of the Ryder Report recommends that Land Rover be split from Rover and be treated as a separate company within BL and becomes part of the new commercial vehicle division called the Land Rover Leyland Group ➢ 1976: One-millionth Land Rover leaves the production line ➢ 1978: Land Rover Limited formed as a separate subsidiary of British Leyland ➢ 1980: Rover car production ends at Solihull with the transfer of SD1 production to Cowley. Solihull is now exclusively for Land Rover manufacture. SD type roof racks. subdued wheels.16 ➢ 1970: Introduction of the Range Rover ➢ 1971: Series III launched ➢ 1975: BL collapses and is nationalised. 5-door Range Rover introduced. Official formation of the Camel Trophy Owners Club by co-founders Neill Browne.8 billion ➢ 2002: Introduction of third-generation Range Rover ➢ 2004: Introduction of the third-generation Discovery/LR3 ➢ 2005: Introduction of Range Rover Sport .S market in April 1986 ➢ 1989: Introduction of the Discovery ➢ 1994: Rover Group is taken over by BMW. Pantelis Giamarellos and Peter Sweetser. Oxford. the Special Vehicles Division of Land Rover created only 250 of these bright yellow SUV's. and is now known simply as Rover ➢ 1986: Range Rover is introduced to the U. ➢ 1983: Land Rover 90 (Ninety)/110 (One-Ten)/127 (renamed Defender in 1990) introduced ➢ 1986: BL plc becomes Rover Group plc.

TPG Capital and Apollo Global Management expressed their interest in purchasing Jaguar Cars and Land Rover from the Ford Motor Company. sports models of which were the SS 90 and SS 100. In 1935 the SS Jaguar name first appeared on a 2.000. Ford acquires the Rover trademark from BMW. a Discovery 3 (LR3). 6-speed gearbox.5-litre. collapses under the ownership of MG Rover Group ➢ 2006: Announcement of a new 2. Jaguar Profile History The 2. ➢ 2008: Ford agreed to sell their Jaguar Land Rover operations to Tata Motors.000th Land Rover rolls off the production line.5litre saloon.17 ➢ 2005: Adoption of the Jaguar AJ-V8 engine to replace the BMW M62 V8 in the Range Rover ➢ 2005: Land Rover 'founder' Rover. who previously licensed its use to MG Rover Group ➢ 2007: 4. donated to The Born Free Foundation ➢ 2007: Announcement from the Ford Motor Company that it plans to sell Land Rover and also Jaguar Cars ➢ 2007: India's Tata Motors and Mahindra and Mahindra as well as financial sponsors Cerberus Capital Management. ➢ 2008:Tata Motors finalised their purchase of Jaguar and Land Rover from Ford. . 68 hp 1935 SS 90 The Swallow Sidecar Company was founded in 1922 by two motorcycle enthusiasts.4-litre diesel engine. Introduction of second generation of Freelander (Freelander 2). William Lyons and William Walmsley. dash and forward-facing rear seats for Defender.

Space. assisted by Walter "Wally" Hassan. such as the XK 120 of 1949. XK engine in an E-Type As fuel octane ratings were relatively low from 1948 onwards. The core of Bill Lyons' success following WWII was the Twin Cam Straight Six Cylinder Engine—a design conceived pre-War and realised while design staff at the Coventry plant were dividing their time between fire-watching (Coventry being a prime Luftwaffe target) and designing the new power plant. times were also tough for other Coventry-based auto-makers and the company was able to buy from John Black's Standard Motor Company the plant where Standard had built the six-cylinder engines it had been supplying to Jaguar. Pace". They were successful in international motorsport. Jaguar's new engine was a hemispherical crossflow cylinder head with valves inclined from the vertical. a road-legal D Type. William "Bill" Heynes. IX. Jaguar's sales slogan for years was "Grace. To place this in context. .Nevertheless. 125 hp Mk IV drophead coupé Jaguar made its name by producing a series of eye-catching sports cars. a mantra epitomised by the record sales achieved by the MK VII. These were all successful and embodied Lyons' mantra of "value for money". was determined to design the Twin OHC unit. It was also employed in the E Type. or Twin Cam engine. The main designer. Mk I and II Saloons and XK 140 and 150. and Dished (Low Octane). originally at 30 degrees (inlet) and 45 degrees (exhaust) and later standardised to 45 degrees for both inlet and exhaust. developed into XK 140 and XK 150. and the E Type (or XKE in the US) of 1961. Jaguar achieved relative commercial success with their early post war models. needing constant fettling into reasonable volume production saloon cars was brave. SS and Jaguar made 3. itself a development from the race winning and Le Mans conquering C and D Type Sports Racing cars refined as the short-lived XKSS. a path followed in the 1950s to prove the engineering integrity of the company's products. three piston configuration were offered: Domed (High Octane). Mks I and II saloons and later the XJ6. The sheer concept of applying what had hitherto been considered a racing or low-volume and cantankerous engine. used in the XK 120. The subsequent engine (in various versions) was the mainstay powerplant of Jaguar. Mk VII Saloon. The buyer was Rubery Owen. Bill Lyons agreed over misgivings from Hassan. a pressed steel body manufacturing company they had acquired in the late 1930s when growth prospects seemed more secure. and Jaguar sold the plant and premises of Motor Panels.5-litre.18 Cash was short after World War II. Flat (Medium Octane). benchmark for pre-war racing and competition engines was the "Double Knocker".

the compact Mark I and 2. In 1951. Financial difficulties and the publication of the Ryder Report led to effective nationalisation in 1975 and the company became British Leyland. the Austin-Morris combine.000 miles of useful life. Later in the hands of the Scottish racing team Ecurie Ecosse two more wins were added in 1956 and 1957. Jaguar secured financial stability and a reputation for excellence with a series of elegantly styled luxury saloons that included the 3 & 3½ litre cars. the Jaguar and Daimler marques formed part of BL's specialist car division or Jaguar Rover Triumph Ltd until a restructure in the early 1980s saw most of the BL volume . firstly in 1951 and again in 1953. the Mark VII. and the XJ6 and XJ12.Jaguar purchased Daimler—not to be confused with Daimler-Benz or Daimler AG—in 1960 from the holding company BSA. with comfortable rides. Ltd (later simply BL plc). as it came to be known. In the 1970s.[citation needed] Jaguar's elan as a prestige motorcar manufacturer had few rivals. The company's post-War achievements are remarkable. Combined with the trend-setting XK 120. and the Stonefield four-wheel-drive all-terrain lorry. which had already taken over Rover and Standard Triumph.19 Few engines have demonstrated such ubiquity and longevity: Jaguar used the Twin OHC XK Engine. the Ferret Scout Car. it was always Lyons' intention to build the business by producing world-class sporting saloons in larger numbers than the sports car market could support. to form British Motor Holdings (BMH) in 1966. VIII. Properly maintained. good handling. which quickly became its principal plant. as well as the Fox Milan reconnaissance and Fox Scout armoured vehicles. the standard production XK Engine would achieve 200. The distinctive "leaping Jaguar" mascot Two of the proudest moments in Jaguar's long history in motor sport involved winning the Le Mans 24 hours race. From the late 1960s. In spite of such a performance orientation. XK 140. and employed in a J60 variant as the power plant in such diverse vehicles as the British Army's Scorpion Light Armoured Combat Reconnaissance Vehicle and its several variants. in the Jaguar XJ6 saloon from 1969 through 1992. and IX. high performance. the resultant company then became the British Leyland Motor Corporation (BLMC) in 1968. considering both the shortages that rove Britain (the Ministry of Supply still allocated raw materials) and the state of metallurgical development of the era. British Leyland Jaguar merged with the British Motor Corporation (BMC). and XK 150 series of sports car. Jaguar used the Daimler marque as a brand name for their most luxurious saloons. All were deemed very good values. and nonpareil E-Type. Jaguar leased Browns Lane from The Daimler Motor Company Limited. and great style. The 1955 victory was somewhat overshadowed by the tragic events that occurred. After merging with Leyland.

Before the sale was announced. The sale was initially expected to be announced by September 2007. Since Land Rover's May 2000 purchase by Ford. and some models now share components. Ford announced that it planned to sell Jaguar. Jaguar was floated off as a separate company on the stock market – one of the Thatcher government's many privatisations.but backed out upon learning that the sale would also involve Land Rover. Anthony Bamford.20 car manufacturing side becoming the Austin Rover Group. but was delayed until March 2008. citing complexities in the deal. Cerberus Capital Management and One Equity Partners (owned by JP Morgan Chase and managed by former Ford executive Jacques Nasser) of the US. Ripplewood Holdings (which hired former Ford Europe executive Sir Nick Scheele to head its bid). chairman of British excavator manufacturer JCB had expressed interest in purchasing the company in August 2006. Land Rover. Tata Motors era . which he did not wish to buy. which didn't include Jaguar. for the X-Type and the Freelander 2. Mahindra and Mahindra backed out of the race for both brands. from 2000. Tata Motors of India and a consortium comprising Mahindra and Mahindra (an auto manufacturer from India) and Apollo Management all initially expressed interest in purchasing the marques from the Ford Motor Company. Aston Martin was subsequently sold off in 2007. Under Ford's ownership Jaguar expanded its range of products with the launch of the S-Type in 1999 and X-type in 2001. Jaguar's listing on the London Stock Exchange was removed on 28 February 1990. although the only shared production facility was Halewood. Between Ford purchasing Jaguar in 1989 and selling it in 2008 it did not earn any profit for the Dearborn-based auto manufacturer.In 1999 it became part of Ford's new Premier Automotive Group along with Aston Martin. TPG Capital. However operationally the two companies were effectively integrated under a common management structure within Ford's PAG. In many countries they share a common sales and distribution network (including shared dealerships). Morgan Stanley and HSBC to advise it on the deal. Volvo Cars and. On Christmas Eve of 2007. On 11 June 2007. along with Land Rover and retained the services of Goldman Sachs. Private equity firms such as Alchemy Partners of the UK. In 1984. Ford Motor Company era Jaguar S-Type based on the Ford DEW98 platform-Ford made offers to Jaguar's US and UK shareholders to buy their shares in November 1989. it has been closely associated with Jaguar.

Jaguar's own Daimler. Ford (as well as representatives of Unite) would now be able to enter into detailed discussions with Tata concerning issues ranging from labour concerns (job security and pensions). However.as well as the final sale price. as well as two dormant brands Lanchester and Rover. Acquisition of jaguar and land rover In June 2008. India-based Tata Motors Ltd. technology (IT systems and engine production) and intellectual property.Ford would also open its books for a more comprehensive due diligence by Tata.According to the rules of the auction process.Tata Motors also received endorsements from the Transport And General Worker's Union (TGWU)Amicus combine as well as from Ford.Jaguar and Land Rover (JLR) from the US-based Ford .Included in the deal were the rights to three other British brands. Reuters reported that American bankers Citigroup and JP Morgan would finance the deal with a USD 3 billion loan. Ford announced that it had agreed to sell its Jaguar and Land Rover operations to Tata Motors of India.21 On 1 January 2008.On 2 June 2008. Ford formally declared that Tata was the preferred bidder. the sale to Tata was completed at a cost of £1. this announcement would not automatically disqualify any other potential suitor.On 18 March 2008. and that they expected to complete the sale by the end of the second quarter of 2008. On 26 March 2008. announced that it had completed the acquisition of the two iconic British brands .7 billion.

two advanced design centers in the UK. which accounted for 90% of its sales.45 billion. Tata came under cash crisis because of the Corus deal and the huge investments in the TATA Nano project which itself was surrounded in a lot of uncertainties. There was widespread skepticism in market over an Indian company owning the luxury brands. national sales companies spanning across the world. In March 2007. it still recorded high sales. Tatas needed to invest a lot in brand building to make JLR profitable. and State Bank of India. Volvo was acquired for US$ 6. The credit rating companies also took a negative outlook toward this deal because of the huge debt requirement to complete the deal. In September 2006. After Ford acquired Jaguar. The sales of Jaguar in many markets declined. as part of the restructuring exercise called the ‘Way Forward' plan decided to dismantle the PAG.3 billion. Citigroup. Tata Motors was interested in acquiring JLR as it will reduce the company’s dependence on the Indian market. The deal included the purchase of JLR's manufacturing plants.22 Motors for US$ 2. and Italy. and it also became a part of the PAG. Onset of recession not only made investment look mistimed. TATA . 2008 as it bought the ownership of luxury brands . and also licenses of all necessary intellectual property rights. given the difficult economic conditions in the key markets of JLR including the US and Europe. but also started wiping out the JLR market. currency risks etc. some of the issues that could trouble Tata Motors were economic slowdown in European and American markets. The company acquired Jaguar from British Leyland Limited in 1989 for US$ 2. In June 2007. but in some markets like Japan. Germany.JLR deal Tata had completed this biggest buy-out in the automobile space by an Indian company on June 2. two advanced design centers in the UK. as it had increased the earnings volatility. In March 1999. Ford Motors Company (Ford) is a leading automaker and the third largest multinational corporation in the automobile industry. Tata Motors raised $3 billion (about Rs 12. . especially in the key US market.000 crore) through bridge loans for 15 months from a clutch of banks.Jaguar and Land Rover. Jaguar. Ford established the PAG with Aston Martin. Morgan Stanley reported that JLR’s acquisition appeared negative for Tata Motors. During the year. Forming a part of the purchase consideration were JLR's manufacturing plants. national sales companies spanning across the world and also licenses of all necessary intellectual property rights.5 billion. Market conditions were extremely tough. adverse economic conditions worldwide in the 1990s led to tough market conditions and a decrease in the demand for luxury cars. and Lincoln. Allan Mulally (Mulally). including JP Morgan. According to industry analysts. funding risks. President and CEO of Ford. Ford sold the Aston Martin sports car unit for US$ 931 million.

After failing to re-brand and integrate these luxury brands with its product portfolio. We have enormous respect for the two brands and will endeavor to preserve and build on their heritage and competitiveness. Ford Motors felt that acquisition was not the right way of penetrating into the upscale segment. Five. Chairman. Along with it due to TATA’s . Two. This would have provided a synergy for TATA Group on a whole. Tata Motors would own the world's cheapest car the US$ 2. On acquiring JLR.500 Nano. in the long run TATA Motors will surely diversify its present dependence on Indian markets (which contributed to 90% of TATA’s revenue). Tata Group. We aim to support their growth. Three. Four. It had acquired Tetley. keeping their identities intact. The whole cost synergy that can be created can be seen in the following diagram.23 Ford announced that it was considering selling JLR. Tata also got two advance design studios and technology as part of the deal. "We are very pleased at the prospect of Jaguar and Land Rover being a significant part of our automotive business. and luxury marquees like the Jaguar and Land Rover. this deal provided Tata an instant recognition and credibility across globe which would otherwise would have taken years. 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. Indica and Safari suffered from internal noise and vibration problems. After the acquisition. This would provide Tata Motors access to latest technology which would also allow Tata to improve their core products in India. Tata Motors' long-term strategy included consolidating its position in the domestic Indian market and expanding its international footprint by leveraging on in-house capabilities and products and also through acquisitions and strategic collaborations. said. for eg. South Korea-based Daewoo's commercial vehicle unit. Why did TATA go for JLR? Tata Motors had several major international acquisitions to its credit. Ratan Tata. the cost competitive advantage as Corus was the main supplier of automotive high grade steel to JLR and other automobile industry in US and Europe. and Anglo-Dutch Steel maker Corus (Refer to Exhibit I for the details of the group's international acquisitions)." Tata Motors stood to gain on several fronts from the deal. the acquisition would help the company acquire a global footprint and enter the high-end premier segment of the global automobile market. One.

In January 2009. would help Tata Motors become one of the major players in the global automobile industry. Tata Motors had to incur a huge capital expenditure as it planned to invest another US$ 1 billion in JLR. Tata Motors had also incurred huge capital expenditure on the development and launch of the small car Nano and on a joint venture with Fiat to manufacture some of the company’s vehicles in India and Thailand. The Chinese and Indian domestic markets for cars have been exceptions. In India the passenger car market has remained more or less flat compared to the previous year. Is deal really worth it? Morgan Stanley reported that JLR’s acquisition appeared negative for Tata Motors. losing a record $517 million on $14. The automobile industry the world over is rationalizing production facilities. just on its India operations. as it had increased the earnings volatility. coupled with the downturn in the global automobile industry.3 billion it had spent on the acquisition.24 footprints in South East Asia will help JLR do diversify its geographic dependence from US (30% of volumes) and Western Europe (55% of volumes). Since then. This. Tata Motors' standalone Indian operations' profits declined by 51% in 2008-09 over the previous year.7 billion in revenues. Tata Motors announced that due to lack of funds it may be forced to roll over a part of the US$ 3 billion bridge loan after having repaid around US$ 1 billion. given the difficult economic conditions in the key markets of JLR including the US and Europe. consolidating brands and dropping model lines and deferring R&D projects to conserve funds.All through the fiscal year ended March 2009 the company bled money. Within the space of a year. While China has witnessed a significant reduction in its automotive-related exports and supplies to automobile companies. was expected to impact the profitability of the company in the near future. reducing costs wherever possible. This was in addition to the US$ 2. The . Tata Motors has gone from being a developing-world success story to a cautionary tale of bad timing and overly ambitious expansion plans. its fortunes have been unsure. the Chinese domestic car market has grown by 7%. Analysts were of the view that the acquisition of JLR. which had a global presence and a repertoire of well established brands. Worldwide car sales are down 5% as compared to the previous year. Jaguar and Land Rover lost an additional $510 million in the 10 months Tata owned it until March 2009. Moreover. as the slump in demand for automobiles has depressed its revenues at the same time Tata has invested nearly $400 million in the Nano launch and struggled to pay off the expensive $3 billion loans it racked up for the Jaguar/Land Rover shopping bill.

Disadvantages by not going for this acquisition? There was immense pressure from the shareholders. at that time no other major automobile brand was available for acquisition with such designing and R&D capabilities. TAMO would have lacked in robust designing capabilities. Ford purchased JLR at $5 bn and sold at almost half the price to TATA after operating it for losses for few years. . to abort the deal as they unanimously agreed that it was over priced and the balance sheet of TATA was not in a position to absorb more loan (as discussed in the previous section).25 financial burden on Tata Motors was expected to increase further with the pension liability of JLR coming up for evaluation in April 2009. Above all. Tata would not have been able enter into the premium segment (>10 lakhs) in India. analysts’ community etc. As the market would have recovered from recession the valuation would have increased since there would have been growth in the demand of JLR thus creating more problems for TAMO.

and faced with a major collapse in vehicle demand in Western Europe and the U.26 Conclusion According to Tata Motors’ annual report for the year 2008. The Company faces a major decline in demand across its product range. I feel strongly that in later years we can look back on the JLR acquisition and say to ourselves that this was a very worthwhile strategic acquisition and one which has brought us considerable technology and global presence” Reported in Chairman’s Statement by Mr. taking whatever steps we need to take to see the year through. it must bear the burden of the major acquisition of JLR. But to many in the Company this is yet another year of challenges with the excitement of meeting such challenges head-on.2009. We believe that Tata Motors will surely rebound since it has the great leadership under Ratan Tata who has successfully managed to sail through many adversities in the past and bring Tata Motors to the global stage. Ratan N Tata. I feel confident that if we can sustain our operations through this difficult period. . “The spirit. commitment and dedication of the whole Tata Motors team at all its locations and across all levels are truly phenomenal and this continues to be the company's greatest asset. the year under review would be viewed as in great despondency. we could overcome all the obstacles in our path.S.