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: In a sense, Tata Motors is now a force to reckon with…globally.
The largest manufacturer of vehicles in India has long-harboured the desire to make its presence felt in the global arena. It did fulfill this ambition to a certain extent when it acquired South Korea’s second-largest truck-maker Daewoo Commercial Vehicles Company in 2004. The company since then has inked a number of key international pacts, but much of this has happened in the commercial vehicles and bus space—a category that has been its core area of strength for the last six decades or so that it has been in existence. The passenger cars segment, in contrast, is a newer category, also one that has been fraught with challenges for it. The first batch of the indigenously manufactured Indica passenger cars, for instance, had technical glitches, which were rectified slowly but steadily by the company. It has over the years attempted to improve its automotive engineering capabilities on the passenger car front, but, at some level, it has yearned to do something big, really big in that segment. It did manage to achieve that with the announcement of the Tata Nano—the Rs 1-lakh car—earlier this year. But that is a vehicle for the masses, something that the Tatas can handle quite effectively. It is the luxury-end, which is a challenge, making the acquisition of Jaguar and Land Rover by Tata Motors significant.
Both Jaguar and Land Rover were brands that Tata Motors pursued fervently. The race really began in 2007, when the shortlisted bidders for the two brands, put on the block by the Detroit-based Ford Motor Company, were announced. These included Tata Motors, archrival Mahindra & Mahindra and US-based private equity player One Equity Partners. Tata Motors eventually stole a march over its rivals to emerge the preferred bidder for the brands, which is manufactured in the UK. After multiple rounds of negotiations with the management and workers’ union, the company finally clinched the deal this year, agreeing to pay $2.3 billion for the two products. The transaction will take another quarter to be completed, but there is no denying the fact that Jaguar and Land Rover will occupy a place of pride in the Tata stable. With the acquisition, Tata Motors has come a full circle, making the jump from a commercial vehicles and bus manufacturer to a maker of sports utility vehicles then indigenous passenger cars and now holder...
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