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http://www.ctv.ca/servlet/ArticleNe.../autos_tata_ford_080403/20080403?s_name=Autos
Ford Motor Co.'s recent sale of the Jaguar and Land Rover brands to India's Tata Group for US$2.3 billion was not a big surprise; it had been rumoured for months. But what Tata does with the two British brands just might surprise the world.
Tata is not a slice-and-dice takeover company. It is in this deal for the long-term. Tata Group chairman Ratan Tata made that clear at last month's Geneva auto show. There, he came across as the well-regarded businessman who a while ago engineered the well-received acquisition of equally iconic Tetley Tea.
"Our plan is to retain the image, the touch, and the feel of Jaguar and Land Rover," Tata said in Geneva. "We will not tinker with the brands in any way. They are special global brands and whoever acquires them has a responsibility to nurture them and enable them to prosper."
We were in Geneva to shoot two episodes of Car/Business on CTV. The Tata Nano, a car that costs the same as three nights in a decent Geneva hotel -- $2,500 - is the focus of a long segment on an upcoming episode of Car/Business.
Viewers will see just what this little car for emerging markets is all about. And viewers will get some very useful insight into Tata and what it takes to produce a car that sells for the price of a Canali suit.
The irony, of course, is that the same company making the Nano is now running two premium brands, brands that Ford Motor Co. could never figure out. Some reports indicate that Ford, since 1989, has squandered as much as $50 billion on Jaguar and Land Rover. That number may be high, but no one denies Ford lost billion on Jaguar and Land Rover.
You thought the Bear Stearns meltdown was a disaster, that UBS, the Swiss investment bank and wealth management icon, is a mess after writing down US$37 billion in bad subprime loans? Well, the money Ford has wasted on Jaguar and Land Rover is stunning by comparison.
We have good reason to believe the Tata takeover is a good one. The brands have passed from an American company in financial distress to an Indian one with a strong balance sheet. What the Tata bosses must avoid are Ford's mistakes. That means Tata should not interfere excessively in the product plans at Jaguar and Land Rover. And lay off the marketing of new models, too.
Time and again Ford stumbled about with Jaguar in particular. The S-Type now being replaced by the excellent XF was first shown in 1997. That's 11 years ago and three lifetimes in the car business.
The X-Type, of course, was a complete disaster. A reworked Ford Mondeo could ever hope to compete against the BMW 3-Series, Mercedes-Benz S-Class and Audi A4.
So that's the past. What of the future? Will Tata give Jaguar and Land Rover the "Tetley tea treatment" by leaving its managers and designers in place, doing what they do best, making and selling cars with minimal interference?
Many think yes. When Tata took over Tetley, the management remained intact and the new managing director, Peter Unsworth, was financing director eight years ago when Tata bought the company.
Jaguar and Land Rover have strong future product plans in place which means there is good reason to believe Tata will keep its distance. And if Jaguar does what is planned it could in the black by 2009 - after 20 years of losses. Land Rover is already profitable.
This brings us to what's coming. Let's start with Land Rover which has already begun to shift its image from ruggedly luxurious to fashionably conscious. Its gas-guzzling SUVs (sport-utility vehicles) may be at the core of the business now, but change is coming.
For proof look at Land Rover's small LRX concept, unveiled at the Detroit auto show in January. A "baby" Land Rover with a gasoline-electric powertrain makes complete sense in a time of spiking pump prices and stiffening government regulations for fuel economy and reduced CO2 emissions.
Land Rover needs to make a real model based on this concept and just might. Remember, the deal with Ford gives Tata access to powertrains, stampings and other vehicle components, in addition to environmental and platform technologies. Ford also will provide engineering support, including research and development, plus information technology, accounting and other services.
The point in all this is that Ford has hybrid technology in the Escape and the coming Fusion. On the surface it appears Tata could use it to do a hybrid Land Rover with Ford's help - say, by 2011.
There's a lot more to Jaguar and Land Rover's future that just one model, though.
For instance, in 2009 the high-performance versions of the XF and XK are coming - the XFR and XKR. According to sources, high-performance versions of both will be based around an all-new 5.0-litre, direct-injection gasoline V-8, in naturally aspirated and supercharged variations.
Look for them later this year, when the Range Rover and Range Rover Sport also get the new V-8. The latter two will also get cosmetic changes to the interiors.
Ford Motor Co.'s recent sale of the Jaguar and Land Rover brands to India's Tata Group for US$2.3 billion was not a big surprise; it had been rumoured for months. But what Tata does with the two British brands just might surprise the world.
Tata is not a slice-and-dice takeover company. It is in this deal for the long-term. Tata Group chairman Ratan Tata made that clear at last month's Geneva auto show. There, he came across as the well-regarded businessman who a while ago engineered the well-received acquisition of equally iconic Tetley Tea.
"Our plan is to retain the image, the touch, and the feel of Jaguar and Land Rover," Tata said in Geneva. "We will not tinker with the brands in any way. They are special global brands and whoever acquires them has a responsibility to nurture them and enable them to prosper."
We were in Geneva to shoot two episodes of Car/Business on CTV. The Tata Nano, a car that costs the same as three nights in a decent Geneva hotel -- $2,500 - is the focus of a long segment on an upcoming episode of Car/Business.
Viewers will see just what this little car for emerging markets is all about. And viewers will get some very useful insight into Tata and what it takes to produce a car that sells for the price of a Canali suit.
The irony, of course, is that the same company making the Nano is now running two premium brands, brands that Ford Motor Co. could never figure out. Some reports indicate that Ford, since 1989, has squandered as much as $50 billion on Jaguar and Land Rover. That number may be high, but no one denies Ford lost billion on Jaguar and Land Rover.
You thought the Bear Stearns meltdown was a disaster, that UBS, the Swiss investment bank and wealth management icon, is a mess after writing down US$37 billion in bad subprime loans? Well, the money Ford has wasted on Jaguar and Land Rover is stunning by comparison.
We have good reason to believe the Tata takeover is a good one. The brands have passed from an American company in financial distress to an Indian one with a strong balance sheet. What the Tata bosses must avoid are Ford's mistakes. That means Tata should not interfere excessively in the product plans at Jaguar and Land Rover. And lay off the marketing of new models, too.
Time and again Ford stumbled about with Jaguar in particular. The S-Type now being replaced by the excellent XF was first shown in 1997. That's 11 years ago and three lifetimes in the car business.
The X-Type, of course, was a complete disaster. A reworked Ford Mondeo could ever hope to compete against the BMW 3-Series, Mercedes-Benz S-Class and Audi A4.
So that's the past. What of the future? Will Tata give Jaguar and Land Rover the "Tetley tea treatment" by leaving its managers and designers in place, doing what they do best, making and selling cars with minimal interference?
Many think yes. When Tata took over Tetley, the management remained intact and the new managing director, Peter Unsworth, was financing director eight years ago when Tata bought the company.
Jaguar and Land Rover have strong future product plans in place which means there is good reason to believe Tata will keep its distance. And if Jaguar does what is planned it could in the black by 2009 - after 20 years of losses. Land Rover is already profitable.
This brings us to what's coming. Let's start with Land Rover which has already begun to shift its image from ruggedly luxurious to fashionably conscious. Its gas-guzzling SUVs (sport-utility vehicles) may be at the core of the business now, but change is coming.
For proof look at Land Rover's small LRX concept, unveiled at the Detroit auto show in January. A "baby" Land Rover with a gasoline-electric powertrain makes complete sense in a time of spiking pump prices and stiffening government regulations for fuel economy and reduced CO2 emissions.
Land Rover needs to make a real model based on this concept and just might. Remember, the deal with Ford gives Tata access to powertrains, stampings and other vehicle components, in addition to environmental and platform technologies. Ford also will provide engineering support, including research and development, plus information technology, accounting and other services.
The point in all this is that Ford has hybrid technology in the Escape and the coming Fusion. On the surface it appears Tata could use it to do a hybrid Land Rover with Ford's help - say, by 2011.
There's a lot more to Jaguar and Land Rover's future that just one model, though.
For instance, in 2009 the high-performance versions of the XF and XK are coming - the XFR and XKR. According to sources, high-performance versions of both will be based around an all-new 5.0-litre, direct-injection gasoline V-8, in naturally aspirated and supercharged variations.
Look for them later this year, when the Range Rover and Range Rover Sport also get the new V-8. The latter two will also get cosmetic changes to the interiors.
