Tata Will Get By With A Little Help From Their Friends
When Tata bought Jaguar Land Rover (JLR) from Ford in 2008, the general consensus was that Ford was off-loading a massive problem, and that Tata should have their collective heads examined. JLR had been nothing but a cash drain on Ford. Sucking up resources which other divisions (cough-Lincoln-cough) sorely needed. The Jaguar brand was damaged due to the X-Type “fiasco” (note the inverted commas, because I still love my X-Type!) and Land Rover wasn’t really held in much higher regard. Even I, a big Jag-fan, had to concede that I was seeing the final days of JLR. How wrong was I?
The Economic Times of India reports that Tata Motors’ profits have soared to 22.2b rupees (that’s just under $500m to you) for the quarter leading up to the end of September. This represents close to a 100-fold increase from last year. How can this be? Well it was down to those “damaged” brands I was talking about earlier. JLR. Demand for JLR vehicles rose by 43 percent on the back of big demand from the United States and China. Especially for the XJ. JLR wasn’t the only riser.
Tata branded vehicles did extremely well. They rose 21 percent in October of this year. Because of these rising sales, Tata is hiring more staff, reversed a decision to close the manufacturing plants for JLR in the UK and is expanding in India. While this is good news for JLR, one thing keeps nagging me at the back of my head. Is JLR’s success down to the products which Ford helped them develop and Tata is reaping? Or is it down to Tata’s management? While I want to believe the latter, I strongly suspect the former.
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It is rather sad that Ford wasn't culturally able to reap the rewards of their efforts. So it goes.
Ford spent a large fortune bring Jaguar up to speed. The cars have their own Jaguar designed engines and use the best components, i.e., Bilstein shocks and Denso electrics. There are very few Ford derived parts, limited to some electrical and hose connectors. It's a pity they did not have the patience to recoup their investment. Seems to have been a sweeping corporate decision to focus on the core brand. Sounds good I suppose.
"Is JLR’s success down to the products which Ford helped them develop and Tata is reaping?" Having done business with Tata's Engineering division (heavy electricals and construction), I have a lot of respect for them. If nothing else, I expect they will do a lot better with JLR than the idiots at British Leyland did.
Watch out world, Jaguar is Jaguar again. Gotta love the new, world-beating XF and XJ.