Tata Group long has been one of India’s most successful enterprises, a family-owned industrial conglomerate with its fingers in many aspects of a booming Indian economy. That included Tata Motors, which made (mostly) inexpensive little cars, including the “world’s cheapest,” the Nano.
But when Tata took over Jaguar Land Rover by buying the double-headed bastion of Britishness from Ford for $2.3 billion in June 2008, few western analysts gave the company a chance of succeeding where a huge American auto company had not been able to. Previous forays by powerhouse companies from emerging markets buying western outfits hadn’t fared well, including Tata Steel’s own acquisition of Corus Steel in 2007.
Doubters sniffed that Tata Chairman Ratan Tata, a car buff, had become too enamored of buying global brands, as Tata acquired Tetley Tea, Daweoo Commercial Vehicles, and the Pierre Hotel in New York. But Tata Motors has confounded those skeptics.[more]
For one thing, the brands have recovered in the U.S. market, where Jaguar Land Rover today reported an overall 31-percent increase in August sales over a year ago — up 27% for Jaguar, 33% for Land Rover, driven by the Range Rover Sport and the Range Rover Evoque — for its best August in five years.
Meanwhile, Jaguar Land Rover is cranking up production in the U.K. these days to help meet demand for its hot-selling, Victoria Beckham-enhanced Evoque model even as it readies the release of the much-anticipated Jaguar F-Type roadster.
“I think people were a bit skeptical and snobbish and maybe had some old colonial hangover,” Tim Urquhart, a senior analyst at IHS Automotive in London, told the New York Times. “If you look at Land Rover and Jaguar now, they probably have the strongest product line in their recent history, if not ever.”
And now, observers are trying to analyze why Tata seems to be succeeding. The company itself credited an investment that “has been carefully targeted and effective” in a response to the newspaper. Others noted Tata’s financial strength and the fact that the company wisely allowed western managers to continue to operate the brands.
There’s also some leftover benefits from Ford ownership of Jaguar for several years as part of its Premier Automotive Group, which included other luxury and near-luxury brands such as Volvo. Ford largely developed Evoque, for example, and Ford engines still are outfitted in Jaguar Land Rover models.
The next chapter for Jaguar Land Rover is to succeed in China, another emerging economy whose dynamics Tata’s top management might well understand — and not at the expense of its British operations, either.
Jaguar Land Rover plans to begin building and assembling cars in China to augment its U.K. manufacturing operations, where it’s adding jobs and (for the first time ever) just implemented a 24-hour production schedule to keep up with global demand for the Evoque. It’s also mulling production in Saudi Arabia.