#LandRover

Christopher writes:

Are you familiar with the Land Rover Three Amigos? I have a 2003 Discovery SE. The ABS, hill decent and traction control lamps all on at once. My mechanic says it’s the ABS module and the fix is $1200-1500 and may not solve the problem. What’s up with this? Sell the vehicle? How do you sell a broken car?

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.

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

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.