CAR DEAL: New Owners Can Restore Hope and Glory to British Brands; Could the Road to Jaguar and Land Rover Be Paved with Gold for Tata Motors? Birmingham-Born Howard Wheeldon, Senior Strategist at Brokers BGC Partners, Analyses the Situation
Byline: Howard Wheeldon
No sooner had the announcement been made that Tata Motors had finally secured Jaguar and Land Rover from Ford at a basic cost of pounds 1.15 billion, than I was asked would I buy an Indian car? A joke of course but I did not rise to the occasion.
Indian-owned these two premium brands may be, but better forget any idea that the products will be anything other than British made. And I am not saying this just because Tata has already said the purchase of the two premium car makers will secure the jobs of the 16,000 staff employed at Solihull, Castle Bromwich and Halewood.
This is about buying two potentially excellent brands. Equally it is about buying a quality product that is available right now and seemingly unwanted and using it to long term advantage.
Those looking at this purchase and believing that at some point the brands will be shipped off to India lock, stock and barrel, just as the Chinese did with the sad remains of MG Rover, are surely missing the point.
Forget who owns it, the point is that Jaguar and Land Rover will never be anything other than British - just as with Rolls-Royce, which is owned by BMW and Bentley, which is in the hands of Volkswagen. Also don't forget, Ford is an American company.
And while the Jaguar brand has been tarnished in the UK and to a lesser extent the US, these markets still remain hugely important for the new owner. Remember, Tata needs the strength of these and other existing markets if in the longer term it is to successfully take the brands back home to India and then enter other new markets. This then is initially as much about improving the brand as it is about thoughts of what may be done in the longer term.
Arguably the Indian economy may not be quite ready for Jaguar and Land Rover just yet. However, one day soon I am sure there will be ample consumer demand and with the growing popularity of four-wheel drive SUVs, Land Rover models would surely sell like hot cakes.
Interestingly, while we in Britain see the Jaguar brand as having been somewhat devalued by Ford, back in India just mention the name Jaguar or Land Rover and you will find both brands are held in very high esteem.
Tata well knows the potential that eventually both car marques could have in India plus other eastern-based markets but it also knows that key to Jaguar and Land Rover success is that they are initially seen as products made in Britain.
So how do they make it work? Apart from how green issues might affect sales we are less worried about Land Rover than Jaguar.
The former appears reasonably well placed and the LRX concept has also been well received.
For Jaguar too the new XF has been well received and before too much longer we will see a replacement of the ageing XJ, which in various forms was around 15 years before Ford bought the company in 1989. …