#Jaguar

Last week was an eventful one for Tata Motors. First, Daimler announced that it had completed selling off its 5.34% stake in the Indian automaker, for USD $422 million. Investors including Citibank and Tata Sons, the largest current Tata Motors stockholder, acquired the shares. Daimler explained the move by saying that it is now well enough established in India in terms of passenger and commercial vehicles, to no longer need an equity share in a local company. Daimler already builds CVs in Pune and its new CV plant in Chennai will go online in 2012. Daimler and Tata have a relationship that dates to 1954, when Tata started assembling Mercedes-Benz trucks. The two companies started local assembly of M-B cars in 1994 under the Telco joint venture.

There are changes afoot at Tata Motors’ Jaguar/Land Rover division, since CEO David Smith departed the company and former Tata CEO Ravi Kant stepped in temporarily. Smith likely left over planned cuts to JLR’s UK production capacity, and now that former Opel boss Carl-Peter Forster and BMW exec Ralf Speth have taken the reigns [via WSJ [sub]], there’s more cost-cutting afoot. Autocar reports that Jaguar Land Rover will downsize its range of architectures, from six to two, as greater platform-sharing both within and between the two marques is set to accelerate.

David Smith, CEO of Jaguar Land Rover has left the company for reasons that JLR and parent firm Tata refuse to elaborate upon beyond telling the Beeb that Smith’s departure is “not linked to the recent breakdown of talks with unions over pay and pensions.” Since the sale to Tata, Jaguar has been negotiating a two-tier wage system and pension reform with workers at its four British plants, but talks stumbled to a halt just days ago. So, that’s definitely not why Smith left suddenly.

Few aspects of the automobile are as examined, analyzed and obsessed upon as styling. Ask most people about cars and they won’t talk about engine displacement or suspension setup; it’s the physical presence of cars that captures interest and sparks passion. For a niche luxury brand like Jaguar, which survives on the margins of major markets without the backing of a full-line automaker, the art and science of auto styling is of supreme importance. Unable to match its rivals in the technological arms race of the upper-echelon luxury segment, Jaguar’s relevance is perhaps more tied to its ability to create compelling designs than any other modern brand. Were this the only challenge facing Jaguar’s chief designer Ian Callum, his job would be one of the most interesting in the business. Thanks to Jaguar’s nearly 40-year stylistic stasis however, Callum’s tenure is nothing less than one of the most significant in the history of automotive design.

Ford were mighty relieved when it managed to off-load it’s British marques, Jaguar and Land Rover, to Tata. Now after 1 year and 9 months of ownership, causing the normally profitable Tata Motors to fall into a £41 million pound loss and falling sales, how do you think Tata are feeling about the purchase of JLR? Sad? Depressed? Suicidal? According to steelguru.com, Ratan Tata is surprisingly optimistic.

If we assume that the global meltdown is a phenomenon that will be over in the near term, I think we will look back and say that these are very strategic and worthwhile acquisitions. There were many questions raised regarding whether these two large acquisitions Corus and JLR are worthwhile and whether the prices were right in terms of being at the top of the market, virtually. My view on that is that if you want to buy a house and that house is of a particular value, then it may not be there if you wait

TTAC Commentator Karl_Donina writes:

Hi, Sajeev. I want to know why it’s so fashionable for automakers to provide obnoxiously labyrinthine automatic shifter gates. It seems to have started with Jaguar’s innocuous J-shaped gates of the ’80s, but these days it seems to have become passé to provide a simple, easy-to-use linear gate — push button or hold lever to one side to move in a straight line out of park and through the gears, or back the other direction. Now every shift, whether from 1 to 2 or N to R or whatever, requires inconsistent and annoying fore-aft and transverse movements. The gates on Subarus I’ve driven lately are ridiculous, as is the one in the Yaris I rented last week. And there are many more. Thanks for whatever enlightenment you can provide.

According to the Financial Times General Electric’s in-house virtual bank, GE Capital, has agreed to give JLR (Jaguar-Land-Rover) new financing secured by vehicles as they come off the production lines. Cash flow wise, JLR will get money almost instantly upon completion of production rather than later on down the road when the dealers and/or their banks pay for the vehicles. GE Capital says it looks forward to helping other European automakers free up working capital by borrowing against “underutilised assets”. This new kind of financing gives companies a powerful incentive to build cars for the “Sales Bank” even if no firm dealer commitments are in hand. Rut Row!

India’s Tata has gone from darling to dumpling in just a year. The high profile Nano People’s Car project still hasn’t gone into production, and the $2.3b purchase of Jaguar and Land Rover now seems spectacularly ill-timed. Business Week recently covered the story with these great opening notes: “What a difference a year makes.” India is in the throes of its own economic crisis; thanks to high inflation, high interest rates, tight credit markets, excessive corporate debt and a suddenly spending averse middle class. Pretty much like most places in the world, but a little different.