Tata Motors fancying Jaguar, Land Rover?

scooby05 · 18th July 2007, 16:13

Quote:

Originally Posted by merve_extreme

They maybe selling well but they are losing money,because of their manufacturing structure and also their quality is drastically dropping.

The stock Markets think Otherwise. Their share prices are at all time highs! The analyists studies are strongly in their favour.

MaserQ · 18th July 2007, 16:52

My first thought was...no way, Tata, Jag and Land Rover?? But, on second thoughts, it doesnt appear to be a liability but an opportunity. Jag and Land Rover are bloody expensive to make. Jag closed down one of their factories near Birmingham, UK recently.

This is where I feel Tata can come in. Get Jag and Land Rover to source heavily from India in short term. It is also an opportunity for component makers to move to the next level - go world class. And the engineering expertise that Tata can take from this marriage is worth its weight in gold.

Tata has global aspirations. Tetlley Tea, Corus etc are ample proof. But if the deal goes through, this would be their toughest test yet, not monetarily but in terms of sustainability.

wolfinstein · 18th July 2007, 17:47

Along with all the Acquisitions Over-drive, Money still needs to be pumped in by NRI's, Global Indian Players to keep the Economy growing in India itself so as to sustain the force.

ggkg · 18th July 2007, 18:10

There was once a beautiful lady that approached Bernard Shaw and told him if we get married and produce a child, it will have my beauty and your intelligence - GBS replied 'what if it has my beauty and your intelligence?!'

IMHO Tata is overreaching itself. The result will be erosion of Jaguar brand value as every buyer will know or suspect parts have been sourced cheap from Indica-producing factories. Europe/UK has not forgotten the CityRover story.

Tata has enough partnerships with Fiat and others to learn what it needs to learn - products of global quality and reasonable prices.

In any case as far selling Jaguarish cars in terms of quality/features in India goes, let us first see what comes out of the Daewoo truck takeover that happened years ago. As long as we neo-rich yuppies keep buying crappy underfeatured cars at inflated prices, not only Tata, no one has incentive to introduce higher specs at reasonable prices.

vcash · 18th July 2007, 21:26

I would'nt get too excited about Tata potentially buying LR and Jag (@ Steeroid - It will be package deal. Infact Bill Ford wanted to sell PAG together and from an inside source, Jac Nasser lowballed him so they decided to split PAG and sell it in bits but with the intention to sell Jag and LR together (Commands more value since Jag doesnt have a SUV lineup and LR doesnt have any sedans).

But I digress - Here's a few reasons why this deal won't happen and even if it does you will not see LR / Jag in India.

1) Ratan Tata's long term strategy is to get the group as much global exposure as possible. He was always limited by Tata Sons board and has finally convinced him to let a lot of international deals take place (Tata Steel, Indian Hotels, Tetley, TCS etc). But with another 5 to 6 Billion dollars required for both companies - I fear it may be too risky for the board to allow.

2) Corus - IMO (And another dozen WS analysts) Tata's overextended themselves with Corus. Overvaluation can be deterimental in the long run and if the global market demand for steel does not keep growing the way it is. Tata's may be in a lot of financial trouble (Never easy paying back a $10B+ dollar loan, esp when fuelled by over-zealous banks). So basically with Jag and LR, the group may be over burdended financially.

3) Glaceau - Many in India would not have heard of this company. Tata's bought a 30% stake into this company that sold flavored water under the brand Vitamin Water. Their plan was to buy the company out totally but had made clear intentions of never bringing it to India as there was a very limited market for flavored water (Similar limited market for Jag / LR). Coke later bought the Tatas 30% stake at an overvalued price and Tata netted about $450Million in a 8 month time frame. Won't be surprised if Jag and LR go the same route.

1100D · 18th July 2007, 21:51

Good to hear, but nothing to fancy about. There are a lot of Indians buying a lot of foreign stuff, doesn't take much.

However what can be cheered is when the Indian stuff can actually box-out a benchmark product (not on price alone) and we can say, hey we bough a Tata instead of a, say, Jaguar.

It would make better sense if they can buy out some engineering firm like Cosworth and use its expertise to grow the indian competence.

Mayavi · 18th July 2007, 21:59

So far TATA has not made any bad deals and lets hope it continues that way.
1. Glaceau was a small company when it started and within 6 - 7 years it became a $2b company when TATA purchased 30% of it. Glaceau was growing at over 50% every year and after 8 months it became a $4b company which is the price Coke paid. TATA was very wise to sell off their share.
2. Corus is a very good buy even if it was expensive. TATA has captive mines and is a low cost producer whereas corus makes high end steel. Its a good marriage. TATA essentially went from a nothing to a top 10 steel manufacturer. In the long run only the top 10 are going to survive and thats the reason why this acquisition makes sense.
3. TATA purchange Tyco after Reliance bought Flag. If I remember right, these two companies own 80% of worlds submarine cables which means TATA and Reliance now control most of the international data traffic.
4. Tetley was TATA's first purchase and it gave TATA a strong foothold and distributor network in international market. Through Tetley TATA now markets its own Tea in international markets. The next logical step for TATA was to conquer american coffee market and they aquired stake in a gourmet coffee maker. Soon we will see TATA coffee in america.
5. Rover and Jag? I dont know how that fits in TATA's plans but if TATA does want to buy, it wont be a big financial strain on them. They only have to see a small share in TCS to raise the funds in house.

Indian companies are a big name in world market now and private investment funds aren't afraid to back them. Even though its Indian companies that are buying european brands, its actually American and European money being funnelled through Indian front. Reliance unsuccesfully tried to buy Dow chemicals which was much bigger than Reliance, the money was to come from Rotschild IIRC, which is American.

Mpower · 18th July 2007, 22:07

Expected price of $1.5 billion is fairly affordable for TATA. They need to understand that Jag and LR depend on Ford for engines and transmission and how will they manage after the umbirical cord is cut off.

First Proton goes to Malaysia and then Rover cars goes to China. Now India's turn?

Mayavi · 18th July 2007, 22:11

TATA would have purchased Rover if not for China's higher bid.

Ram · 19th July 2007, 16:51

Both Tata Motors Ltd. and Mahindra & Mahindra Ltd. are exploring the possibility of bidding for Jaguar and Land Rover.

Tata may actually finance a bid with JV partner Fiat.

There are also reports Ford may sell Volvo of Sweden.

Where is Ford heading and why?

Steeroid · 19th July 2007, 17:12

Quote:

Originally Posted by Mpower

Expected price of $1.5 billion is fairly affordable for TATA. They need to understand that Jag and LR depend on Ford for engines and transmission and how will they manage after the umbirical cord is cut off.

Win-Win for Ford - they get rid of the hassle of RUNNING the business, but they still get business by way of supplying engines.

Quote:

Originally Posted by ram

First Proton goes to Malaysia and then Rover cars goes to China. Now India's turn?

You mean Lotus goes to Malaysia, dont you?

Quote:

Originally Posted by ram

Tata may actually finance a bid with JV partner Fiat.

There are also reports Ford may sell Volvo of Sweden.

Where is Ford heading and why?

Fiat have indicated they are not interested.

Ford needs cash. Volvo, Jag and LR together will get them about $10 Billion. Now thats a lot of money.

Wonder when they will get rid of the Mazda stake too.

safari_lover · 19th July 2007, 17:40

According to one of the report on Autocar UK (link given in some other thread), 19th July is the D-day. So will we come to know of it tomorrow?

Mpower · 19th July 2007, 17:57

Yes, thanks Steeroid. Lotus goes to Proton. Frankly, nothing good came out of that. Lotuses are still made in UK and cost a bomb. Proton's engg capability has still not improved like Hyundai.

itsmevishal2k4 · 19th July 2007, 20:08

i have also heard this

Quote:

Tata to ink India's biggest overseas takeover?
Wednesday, July 18, 2007

NEW DELHI: India’s largest conglomerate Tata Group is in the early stages of evaluating a bid for the Jaguar and Land Rover brands which, if completed, would rank among India's biggest overseas takeover deals, The Daily Telegraph reported Wednesday.

Tata Motors, which is controlled by Ratan Tata, India's best-known businessman, is understood to have instructed advisers to begin evaluating the merits of a joint offer for Jaguar and Land Rover, which have been earmarked for disposal by struggling American car giant Ford. Analysts suggest that Jaguar and Land Rover may fetch about USD 1.5 billion.

Sources told CNN-IBN that Tata Motors' evaluation of a bid was at an "exploratory" stage and that speculation is rife that Tata Motors has already signed a confidentiality agreement with Ford in recent days.

Ratan Tata having acquired British steel company Corus through his Tata Steel business for £6.7 billion earlier this year, is now looking forward to India's biggest foreign takeover.

The group's automotive unit has been drawing up plans to launch the world's cheapest car, a Rs 1 lakh economy vehicle that could be launched as early as next January. Besides Tata, other car makers may be interested in bidding, while a formal auction would also be likely to attract private equity firms. Cerberus, the US buyout firm, acquired Chrysler this year for just under $7.5bn.

Source: [COLOR=#22229c]CNN-IBN Live[/COLOR]

also i heard TATA is bringing ferrari to india?

Zappo · 19th July 2007, 20:31

Quote:

Originally Posted by Mayavi

Indian companies are a big name in world market now and private investment funds aren't afraid to back them. Even though its Indian companies that are buying european brands, its actually American and European money being funnelled through Indian front. Reliance unsuccesfully tried to buy Dow chemicals which was much bigger than Reliance, the money was to come from Rotschild IIRC, which is American.

Very interesting observation there, and meaningful as well. Proves two things.

* Essentially there is nothing wrong with these companies. The same Americans are putting in the same top dollars for these companies. Only that this time someone else is fronting for them. Its the Indians.

* What we and the rest of the world always knew is now getting formalized or rather I would say hammered in. Indians have good managing capabilities and business sense. Americans are willing to put in their $$$ into the same "pit holes", as some analysts called those huge money looser corporate behemoths, as long as the Indians are in charge.

18th July 2007, 16:52	#17
MaserQ Senior - BHPian Join Date: Oct 2006 Location: Bangalore Posts: 1,196 Thanked: 166 Times	My first thought was...no way, Tata, Jag and Land Rover?? But, on second thoughts, it doesnt appear to be a liability but an opportunity. Jag and Land Rover are bloody expensive to make. Jag closed down one of their factories near Birmingham, UK recently. This is where I feel Tata can come in. Get Jag and Land Rover to source heavily from India in short term. It is also an opportunity for component makers to move to the next level - go world class. And the engineering expertise that Tata can take from this marriage is worth its weight in gold. Tata has global aspirations. Tetlley Tea, Corus etc are ample proof. But if the deal goes through, this would be their toughest test yet, not monetarily but in terms of sustainability.
	() Thanks

18th July 2007, 17:47	#18
wolfinstein BHPian Join Date: Feb 2006 Location: New Delhi Posts: 994 Thanked: 20 Times	Along with all the Acquisitions Over-drive, Money still needs to be pumped in by NRI's, Global Indian Players to keep the Economy growing in India itself so as to sustain the force.
	() Thanks

18th July 2007, 18:10	#19
ggkg BHPian Join Date: Dec 2006 Location: Bangalore Posts: 156 Thanked: 177 Times	There was once a beautiful lady that approached Bernard Shaw and told him if we get married and produce a child, it will have my beauty and your intelligence - GBS replied 'what if it has my beauty and your intelligence?!' IMHO Tata is overreaching itself. The result will be erosion of Jaguar brand value as every buyer will know or suspect parts have been sourced cheap from Indica-producing factories. Europe/UK has not forgotten the CityRover story. Tata has enough partnerships with Fiat and others to learn what it needs to learn - products of global quality and reasonable prices. In any case as far selling Jaguarish cars in terms of quality/features in India goes, let us first see what comes out of the Daewoo truck takeover that happened years ago. As long as we neo-rich yuppies keep buying crappy underfeatured cars at inflated prices, not only Tata, no one has incentive to introduce higher specs at reasonable prices. Last edited by ggkg : 18th July 2007 at 18:16.
	() Thanks

18th July 2007, 21:26	#20
vcash BHPian Join Date: Dec 2006 Location: Los Angeles Posts: 453 Thanked: 22 Times	I would'nt get too excited about Tata potentially buying LR and Jag (@ Steeroid - It will be package deal. Infact Bill Ford wanted to sell PAG together and from an inside source, Jac Nasser lowballed him so they decided to split PAG and sell it in bits but with the intention to sell Jag and LR together (Commands more value since Jag doesnt have a SUV lineup and LR doesnt have any sedans). But I digress - Here's a few reasons why this deal won't happen and even if it does you will not see LR / Jag in India. 1) Ratan Tata's long term strategy is to get the group as much global exposure as possible. He was always limited by Tata Sons board and has finally convinced him to let a lot of international deals take place (Tata Steel, Indian Hotels, Tetley, TCS etc). But with another 5 to 6 Billion dollars required for both companies - I fear it may be too risky for the board to allow. 2) Corus - IMO (And another dozen WS analysts) Tata's overextended themselves with Corus. Overvaluation can be deterimental in the long run and if the global market demand for steel does not keep growing the way it is. Tata's may be in a lot of financial trouble (Never easy paying back a $10B+ dollar loan, esp when fuelled by over-zealous banks). So basically with Jag and LR, the group may be over burdended financially. 3) Glaceau - Many in India would not have heard of this company. Tata's bought a 30% stake into this company that sold flavored water under the brand Vitamin Water. Their plan was to buy the company out totally but had made clear intentions of never bringing it to India as there was a very limited market for flavored water (Similar limited market for Jag / LR). Coke later bought the Tatas 30% stake at an overvalued price and Tata netted about $450Million in a 8 month time frame. Won't be surprised if Jag and LR go the same route.
	() Thanks

18th July 2007, 21:51	#21
1100D Senior - BHPian Join Date: Jun 2006 Location: Calcutta Posts: 4,390 Thanked: 4,116 Times View My Garage	Good to hear, but nothing to fancy about. There are a lot of Indians buying a lot of foreign stuff, doesn't take much. However what can be cheered is when the Indian stuff can actually box-out a benchmark product (not on price alone) and we can say, hey we bough a Tata instead of a, say, Jaguar. It would make better sense if they can buy out some engineering firm like Cosworth and use its expertise to grow the indian competence. Last edited by 1100D : 18th July 2007 at 21:55.
	() Thanks

18th July 2007, 21:59	#22
Mayavi BHPian Join Date: Apr 2007 Location: Scottsdale Posts: 683 Thanked: 10 Times View My Garage	So far TATA has not made any bad deals and lets hope it continues that way. 1. Glaceau was a small company when it started and within 6 - 7 years it became a $2b company when TATA purchased 30% of it. Glaceau was growing at over 50% every year and after 8 months it became a $4b company which is the price Coke paid. TATA was very wise to sell off their share. 2. Corus is a very good buy even if it was expensive. TATA has captive mines and is a low cost producer whereas corus makes high end steel. Its a good marriage. TATA essentially went from a nothing to a top 10 steel manufacturer. In the long run only the top 10 are going to survive and thats the reason why this acquisition makes sense. 3. TATA purchange Tyco after Reliance bought Flag. If I remember right, these two companies own 80% of worlds submarine cables which means TATA and Reliance now control most of the international data traffic. 4. Tetley was TATA's first purchase and it gave TATA a strong foothold and distributor network in international market. Through Tetley TATA now markets its own Tea in international markets. The next logical step for TATA was to conquer american coffee market and they aquired stake in a gourmet coffee maker. Soon we will see TATA coffee in america. 5. Rover and Jag? I dont know how that fits in TATA's plans but if TATA does want to buy, it wont be a big financial strain on them. They only have to see a small share in TCS to raise the funds in house. Indian companies are a big name in world market now and private investment funds aren't afraid to back them. Even though its Indian companies that are buying european brands, its actually American and European money being funnelled through Indian front. Reliance unsuccesfully tried to buy Dow chemicals which was much bigger than Reliance, the money was to come from Rotschild IIRC, which is American. Last edited by Mayavi : 18th July 2007 at 22:00.
	() Thanks

18th July 2007, 22:07	#23
Mpower Senior - BHPian Join Date: Mar 2005 Location: Bangalore Posts: 10,399 Thanked: 1,735 Times View My Garage	Expected price of $1.5 billion is fairly affordable for TATA. They need to understand that Jag and LR depend on Ford for engines and transmission and how will they manage after the umbirical cord is cut off. First Proton goes to Malaysia and then Rover cars goes to China. Now India's turn? Last edited by Mpower : 18th July 2007 at 22:10.
	() Thanks

18th July 2007, 22:11	#24
Mayavi BHPian Join Date: Apr 2007 Location: Scottsdale Posts: 683 Thanked: 10 Times View My Garage	TATA would have purchased Rover if not for China's higher bid.
	() Thanks

19th July 2007, 16:51	#25
Ram Senior - BHPian Join Date: Dec 2005 Location: Singapore, Mumbai, Nagpur Posts: 2,166 Thanked: 223 Times View My Garage	Both Tata Motors Ltd. and Mahindra & Mahindra Ltd. are exploring the possibility of bidding for Jaguar and Land Rover. Tata may actually finance a bid with JV partner Fiat. There are also reports Ford may sell Volvo of Sweden. Where is Ford heading and why?
	() Thanks

19th July 2007, 17:40	#27
safari_lover Senior - BHPian Join Date: Feb 2007 Location: Bengaluru / Bagdal Posts: 1,155 Thanked: 785 Times	According to one of the report on Autocar UK (link given in some other thread), 19th July is the D-day. So will we come to know of it tomorrow?
	() Thanks

19th July 2007, 17:57	#28
Mpower Senior - BHPian Join Date: Mar 2005 Location: Bangalore Posts: 10,399 Thanked: 1,735 Times View My Garage	Yes, thanks Steeroid. Lotus goes to Proton. Frankly, nothing good came out of that. Lotuses are still made in UK and cost a bomb. Proton's engg capability has still not improved like Hyundai.
	() Thanks