bidding war round the corner for Jaguar and Land Rover
for an estimated price of $1.5 billion, which features
Tata Motors Ltd, India''s biggest automobile company,
and Mahindra & Mahindra Ltd is symbolic of the evolving
Indian businesses making a mark in the global market
place, says Bundeep Singh Rangar, chairman, IndusView
Advisors, the India-focused cross-border advisory firm.
acquisition of Land Rover and Jaguar, the UK-based iconic
marques owned by Ford Motor Company, the US-based world''s
third largest automaker (behind GM and Japan''s Toyota)
has the potential to raise the Indian automotive sector
to the highest level to compete with sports Utility
Vehicle (SUV) brands like Mitsubishi Pajero; Toyota''s
Land Cruiser Prado and Highlander; Jeep Wrangler by
American automaker Chrysler Group; Hummer from US-based
General Motor Corp; among others on the one hand and
luxury car manufacturers such as Audi AG, Bayerische
Motoren Werke AG (BMW), and Mercedes-Benz of Germany,
etc, on the other.
India is on track to become the world''s third-biggest
car manufacturing country by 2030 leaving behind the
UK and Canada as a major car-producing country by 2008.
Its car production capacity is expected to surpass 2
million units by 2008 from the current capacity of 1.4
million units. The country offers the benefit of cost-efficient
manufacturing, world-class production skills and availability
of quality manpower.
Indian automotive sector, characteristically driven
by traditional and conservative business conglomerates
is under-going a fundamental shift as companies set
out to unlock the benefits of global scale of operations
exhibited by the increasing merger & acquisition
(M&A) deals in the sector worth more than $515 million
from 17 deals so far this year, ie almost equal to the
value and volume of deals done by the sector in the
whole of last year.
The show of growing ambition by the companies in the
sector mirrors the growing aspirational value among
consumers in the Indian market not only to own
a car, but also associate with a brand and upgrade to
a luxury car, a segment that is growing at 25 per cent
annually commanding a share of almost 27 per cent in
the current sales.
Such aspirations have seen more than 5,000 luxury cars
added to the Indian roads in 2006, up from 3,000 in
2005 and just 1,000 in 2004, according to estimates.
It''s just a matter of time, before global luxury car
brands Volkswagen, Lamborghini, Rolls Royce Phantom,
Bentley, Porsche, Aston Martin and Ferrari roll out
their India plans in full steam.
The bidding war round the corner for Jaguar and Land
Rover, the UK-based iconic marques owned by Ford Motor
Company, for an estimated price of $1.5 billion, which
features Tata Motors Ltd, India''s biggest automobile
company, and Mahindra & Mahindra Ltd, tractor &
utility vehicle manufacturer, among others is symbolic
of the evolving Indian businesses making a mark in the
global market place.
Between Tata Motors and Mahindra & Mahindra, whoever
walks away with the deal, the moment will be historic
as it will mark the automotive sector''s entry into the
elite billion- dollar acquisitions club.
With the two cult luxury brands in its armory, the winner
will see itself take the first steps in to the un-explored
premium segment and expanding global market place, with
niche patrons apart from a combined workforce of 20,000
and state-of-the-art engineering platforms.
The Indian partner on its part will bring on board the
management expertise to save cost and improve production
processes by virtue of coming from a country where economies
of scale is the foundation of a profitable enterprise.
The other reason why this deal will be significant is
that it will further reinforce the prominence of the
Indo-UK merger & acquisitions deal activity which
has already seen the country''s two of the largest deals
the acquisition of Hutchison Essar Ltd India''s
second largest GSM mobile service provider by the UK''s
Vodafone Group Plc and the acquisition of the UK''s largest
steel maker Corus Group Plc by India''s Tata Steel Ltd.
India is the second largest job creator in Britain
The investments by India Inc. in Britain during the
fiscal year 2006-07 has created 5,130 jobs, second to
the US, according to the UK''s Department of Trade and
Industry. In terms of the number of new projects, India
has been ranked third with 69 new projects, after 540
new projects US projects and 95 new French projects.
to Think London, an agency promoting investment into
the city, Indian investment in the UK had gone up 111
per cent to 76 projects, creating almost 4,000 jobs
during 2005-06. The Indian investment has contributed
$67 million (£33 million) to the London economy