by Kamla Bhatt
Yesterday it was announced that Tata Motors of India is acquiring Jaguar and Land Rover from Ford Motors, which was once one of three automotive giants of Michigan. Tata’s acquisition of these two high-end automobile brands is one of the central topics of conversation in global mainstream media and blogs.
Within a short span of three months Tata Motors has creates quite a bit of ripple in the global automotive industry. In early January Ratan Tata unveiled its people car “Nano” aptly dubbed as the “people’s car” in New Delhi. What caught many people by surprise, especially from the automotive world, is the price point of the Nano: $2500. That makes Nano the cheapest car in the world. Earlier today Tata Motors created yet another major ripple when it announced that it is acquiring Jaguar and Land Rover, two well-known auto brands from the struggling US auto giant Ford Motors. Tata Motors will pay $2.3 billion to acquire Jaguar and Land Rover. Mark Silva captures the sale of Jaguar and Land Rover by tracing back the British roots of these two automobile companies and in a way points out the irony of the sale.He writes:
The empire was turned on its head today: With Ford Motor Co.’s announced sale of Jaguar and Land Rover to India’s Tata Motors, the ownership of two of Great Britain’s legendary motor marques will pass this year from one former British colony to another.
This isn’t so much a story of globalization as it is a tale of the globe turned on its axis…Today, in the history of an upended world economy, India’s Tata bought two of the proud motor marques of England, Jaguar and Land Rover.
John Elliot of Riding the Elephant wonders if Ratan Tata can break a cycle of decline of these two high-end automobile brands? Elliot thinks that Ratan Tata has a chance of pulling it off, but wonders about who will step into Tata’s (70 years old) shoes once he retires:
It is Tata who has provided the personal drive and leadership to turn Tata Motors into a business that can produce the Nano and buy two world famous brands – in the same year. There’s a big job waiting for someone – and Tata is not yet saying who.”
Truemors, a Silicon Valley blog takes a friendly and humorous dig at Tata’s acquisition of Jaguar and Land Rover. Jaguar is expected to become affectionately known as the “left Tata”, while the slightly larger Land Rover will take the role of “right Tata”.
Krishna Raj of My Capital Market Weblog sums up the key points of the deal in his blog post.
Ford will also supply power trains, stamping, and other components. Along with that, it will provide engineering support, including research and development. Ford Motor Credit will provide financing to JLR dealers for 12 months. There will be no change in the terms of employment for JLR employees. Ford added that the deal comprises of brands, manufacturing plants, and IPR. The deal will be closed by the end of the next quarter.”
Gaurav Shukla of brandfaqs writes that the Tata Group has almost 98 companies in its fold and provides a nice overview of some of the major companies.
AutoPandit points out that Tata Motors is now the maker of low-end as well as high-end luxury cars. Nishant Kaushik points out that 10 years ago such a thing as an Indian company buying a well-known company was unheard of. His blog post underscores how far India has changes since then.