Tata's magnificent opportunity
05 January 2008
Tata Motor's likely buy-out of Jaguar and Land Rover may appear ambitious and risky, but offers the company a potentially lucrative - though challenging – opportunity. By Vivek Sharma.
Speculation about Tata Motor's bid for Jaguar and Land Rover (JLR) has been doing the rounds for many months, since Ford announced its intention to sell these brands. But, discussions and analysis of the deal were hijacked by the 'supposedly racist' remarks against the deal from a Jaguar dealer in the US.
While the defenders of our national pride spent hours on television and consumed tonnes of newsprint to attack a remark which should have been simply ignored, the real issue of whether the deal makes sense for Tata Motors was largely forgotten.
Now that Ford has announced Tata Motors as the preferred bidder for JLR, here is a look at what the deal means to Tata Motors.
Why the deal appears stupid
Difference in profile: When the former Arcelor CEO Guy Dolle said his company made perfume when Mittal made only eau de cologne, it was indeed a bit of an exaggeration. But he was pilloried. If someone uses the same allegory to describe the potential Tata–JLR deal, it would be an understatement.
A more apt comparison would be between a bottle of Bisleri and a bottle of 1995 vintage Krug champagne. Both will serve the same purpose, more or less. The first will quench your thirst in a no-nonsense, but very cost-efficient way, while the second will transform the apparently simple act of drinking bubbly into a sophisticated and memorable process that, if performed in the presence of lesser beings, will make you feel like an emperor.
There is nothing in the Tata Motors product line-up that can be compared against the recently launched Jaguar XF. The best Tata sedan, Indigo XL, is more like one of those simple motor boats in front of the super luxury yacht The Jaguar XF is arguably the best looking luxury sedan available today.