In what would mark a major step-up in Tata Motors? global ambitions, the Indian carmaker is understood to be evaluating making a bid for the Jaguar and Land Rover brands of embattled US car major Ford.
Tata Motors, actively engaged in overseas acquisition and expansion plans since it bought South Korea?s Daewoo Commercial Vehicle in 2004, is reported to be in ?the early stages of evaluating a bid? for the two automobile brands, according to Britain?s Daily Telegraph newspaper.
However, the company preferred not to comment.
?As a matter of policy, Tata Motors does not comment on speculation on mergers and acquisitions,? a spokesman said in Mumbai.
According to the Daily Telegraph, Tata Motors ?is understood to have instructed advisers in the past fortnight to begin evaluating the merits of a joint offer? for Jaguar and Land Rover, which have been earmarked for disposal by Ford.
The estimated price of the two brands, which are being clubbed together for sale by Ford, is pegged at about $1.5 billion.
However, the newspaper said Tata Motors? evaluation of a bid was at an ?exploratory? stage and ?may not lead? to a formal bid.
Mohit Arora, India director for auto consultancy firm JD Power, told FE from Singapore that a successful bid appeared to be a ?good fit? for the Indian auto major, though there were issues that remained to be tackled. ?If it goes through, there are some good products that Tata Motors would get. Jaguar?s luxury cars would complement the Tata Motors brand and give it access to high-end products,? he said.
However, Land Rover?primarily a large SUV maker?would require much more homework by the Tatas regarding how the expensive vehicles would add to its fleet. ?Also, can Tata Motors manage complex international networks?? Arora asked, adding that a possible deal would also raise doubts about the Tatas? own brand positioning.
?On the one hand, it?s in the process of making one of the world?s cheapest cars, and on the other, it is trying to acquire one of most luxurious brands like Jaguar. It will need to address the brand positioning issue,? he said.
Tata Motors, which listed on the NYSE in 2004, has been making rapid strides for a greater share of the global auto business.
It has a partnership with Fiat that gives it access to the Italian car major?s world-class powertrains for its next generation car offerings and also helps it penetrate foreign markets.
The company also acquired a 21% stake in Spanish bus company Hispano Carrocera in 2005 and also has a joint venture with Brazil?s Marco Polo for buses and coaches.