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How Tata Kept Jaguar Land Rover Afloat

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On: Tue, Oct 1, 2013 at 10:44AM | By: Nick Bakewell


How Tata Kept Jaguar Land Rover Afloat

In June of 2008, Indian car juggernaut Tata Motors acquired the services and holdings of Jaguar Land Rover from Ford for a cool $2.3 billion. Not a bad price, considering the stylistic cachet and storied history apparent in both brands. At the time, despite the relatively small outlay, many analysts considered the acquisition a thoroughly flawed idea. Given the financial crisis, no one was going to fork over the cash for luxurious Jags or imperious Range Rovers. Even if you still had some of your money left, it was social suicide be seen swanning around town in a leather-and-walnut-clad slab of English pomp. How, then, has Tata managed to rescue these two brands from the auspices of Ford and keep them both current and profitable?

First and foremost, by staying hands off. Tata has avoided that trap that lots of corporations in their position fall into, which is to buy up a property and then, like a spoiled toddler with a new toy, play with it until it breaks. By letting JLR continue to manage its own affairs, they’ve avoided diluting the brands and throwing their corporate structures into turmoil. Like the patron of a renaissance artist, Tata recognizes the quality inherent in JLR’s products and rather than trying to warp and twist them into something they’re not, allows them access to its generous coffers, as long as they get on with their business.

The Range Rover Evoque is a fine example of this: it’s a great car, one that does double-duty almost as well as its bigger sibling, equally at home on the boulevard as on the craggy escarpment. In Ford’s hands, the Evoque would have wound up being a wishy-washy pretty thing, designed only to satisfy a niche, and toppling over at the first sign of some damp grass. Because they were allowed the time and money to retain their design integrity, however, Land Rover put some supreme engineering into the Evoque, ensuring that despite its glamour model looks it would still ford a stream or climb a mountain as well as anything else in their range.

Tata’s cash kept JLR going through the most austere stretch of the financial crisis, and now that things are starting to look up again, JLR is posting record sales. In spite of much evidence to the contrary, Tata’s investment has come good, and we get to reap the benefits (F-type, I’m looking at you). It’s a lesson that I think many large car conglomerates could stand to learn: by staying hands off and letting your brands be themselves, you stand a better chance of making your money back, consumers get a product they want from a company that likes what they make. In short, everyone wins.




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