Jaguar, Land Rover Sold: No Major Changes Expected

Jaglandroversale

Business as usual.

That's the general reaction to news that Tata Motors of India has completed the purchase of Jaguar and Land Rover from Ford Motor Co. for $2.3 billion — less than both the $2.5 billion that Ford paid for Jaguar and the $2.7 billion it paid for Land Rover.

Both company officials and dealers quickly downplayed any negative effects of the sale to Tata, saying the only change is in ownership.

Jaguar and Land Rover said dealers will continue to sell, service and warranty existing products, and product lineups are expected to grow rather than dwindle now that a company with deep pockets has taken over from a company that lost $2.7 billion last year.

"The parties are still undergoing due diligence, and the final agreement will be worked out sometime in June, but it's business as usual," said Jaguar/Land Rover spokesman Tim Watson.

Tata chairman Ratan Tata has said his company intends to grow the brands and the image and not tinker with them.

"If anything changes, we'll have to live with it, but I don't expect any changes," said Bill Knauz, a Lake Bluff, Ill., Land Rover dealer. "We'll have the same vehicles to sell and eventually some new ones, plus Ford has reached an agreement to supply Tata with parts and components (including engines). Maybe if they said they aren't going to build this or that, then they would muddy the waters, but we haven't heard about any of that happening."

Howard Orloff Imports in Chicago sells Jaguar and Land Rover cars, as well as Volvo, a luxury division Ford didn't sell.

"I see this as a positive opportunity," said Dave Sacco, general sales manager at Orloff. "Tata is in a variety of businesses and is the General Electric of India. They have big money to invest in growing the product."

Analysts were also positive about the news.

"Tata understands these are premium luxury brands and customers expect first-class treatment, and there's no reason for that to change," said Joe Phillippi, who is head of his own automotive consulting firm. Tata is known mostly for building trucks and extremely low-cost cars that don't meet U.S. safety standards. "Tata wouldn't even try to radically change things. Their challenge now is to keep up with the competition — Mercedes, Lexus  and BMW — in bringing new product to market. One reason they enlisted Ford to supply it with technology as well as engines is that it would cost Tata about $1 billion to bring out one new-from-the-ground-up model and about $500 million for one new-from-the-ground-up engine."

Essentially, working with Ford means Tata can add newer models quickly and at less cost, a formula Ford would like to adopt as well.

By Jim Mateja | March 26, 2008 | Comments (8)

Comments 

J

Can their reliability tank anymore than they already are?

joel

you know iam happy that a foreign company bought this 2 cars, most foreign cars are the best and because of resale value,iam hoping that land rover and jaguar vehichles are manufactured over seas instead of here.lets just hope a foreing country buys saab back from GM. i have nothing against for their super duties is the only thing i buy from them.

joel,
Maybe noone told you, but jaguars, landrovers, and saabs have never been built here. Furthermore, Jaguar's reliability improved drastically under Ford's ownership. Also, you may want to think about how resale value works too- its not based on where a vehicle is built.

Broq

As a Brit I am saddened to think that Land Rover has been sold to Tata. The article on Land Rover Owners magazine confirms that at least for the time being jobs are safe, which is always a concern when this type of thing happens.

Samrat Chandragupt

You should have been sad when they were sold to Ford. As they have not been British owned since 1989 and 1999 respectively. I think the best option was for Tata to buy them. If a Chinese company had bought them that would have been a problem. Tata knows how to run companies without destroying them. You will not find a single Tata family member is Forbes. This is because they give away 50% of their earnings to charitible causes. Which Western company does that? I will feel good next time I buy a Range Rover. As I will know I am getting a tax deduction and helping someone. I would have been sad if GM bought them or Cherry Motors, not Tata.

Samrat Chandragupt,
If they are giving away their earnings, how are YOU getting a tax write off?

I read in a www.brandweek.com article that Jaguar and Land Rover's sales have declined significantly since Ford took over...I'm really surprised about this because the quality of the cars improved after Ford bought them..I guess Ford didn't really do well in terms of brand marketing

I read in a www.brandweek.com article that Jaguar and Land Rover's sales have declined significantly since Ford took over...I'm really surprised about this because the quality of the cars improved after Ford bought them..I guess Ford didn't really do well in terms of brand marketing

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