Project of Acqutition of Jaguar

8/3/2019 Project of Acqutition of Jaguar

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SRI SHARADA INSTITUTE OF INDIAN

MANAGEMENT-RESEARCH

PROJECT

ON

Acquisition of Jaguar & land Rover

By Tata Motors

Sri Sharada Institute of Indian Management-Research

7, Institutional Area, Phase-II, Vasant Kunj, New Delhi -110070

Website : www.srisiim.org


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( 2010-2012 )

Submitted To: Submitted

by:

Prof. Harpreet Singh Deepak Singh(108)

H.R.Praveen(111)

DECLARATION

We,Deepak Singh, H.R. Praveen and Sanjeev Roy student of PGDM (2010-

12) hereby declare that we have completed this project on Acquisition of

Jaguar & land Rover By Tata Motors The information submitted is true

to the best of our knowledge.

Deepak Singh

H.R.Praveen

Sanjeev Roy

(PGDM 2010-12)


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ACKNOWLEDGEMENT

The Acquisition of Jaguar & land Rover By Tata Motors has been given

to us as final Project (part of the curriculum in PGDM)

We have tried our best to present this information as clearly as possible using

basic terms that we hope will be comprehended by the widest spectrum of

researchers, analysts and students for further studies.

We have completed this study under the guidance and supervision ofProf.

Harpreet Singh.We would have failed in our duty if not acknowledge the

esteemed scholarly guidance, assistance and knowledge received from them

towards fruitful and timely completion of this work.

Deepak Singh


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H.R.Praveen

Sanjeev Roy

Introduction

Tata Motors is the largest multi-holding automobile company in India and it is the fourthlargest truck producer in the world. In addition, Tata Motors is also the second largest bus

producer in the world, with the revenues of US$ 8.8 billion in the financial year 2008. Since

its establishment in 1945, Tata Motors has grown significantly in the past 60years with the

strategies of joint venture, acquisition and launched new products in different market

segments (i.e. passenger cars, commercial vehicles and utility vehicles).

A significant breakthrough for Tata was the development and commercialization of the truly

Indian cars and they are Tata Indica (1998) and Tata Indigo (2002). Tata Motors has

experienced many joint ventures with Daimler Benz, Cummis Engine Co. Inc., and Fiat and

successfully acquired Daewoo Commercial Vehicle Co. Ltd. In the year 2008, there were

two most significant events which have had a momentous impact on the scale of theCompanys operations and its global image. The launching of Tata Nano, the world cheapest

car and the acquisition of Jaguar and Land Rover, the two iconic British brand have made

Tata Motors well known to the people in the world.


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Tata Motors has proven excellence over the years through continuous strong financial

results, market expansion, acquisition, joint ventures and improvement and introduction of

new products, it seems to have a promising future. But it failed the expectation as the

company was in trouble right after the acquisition of Jaguar and Land Rover (JLR) in June

2008 due to the arrival of global financial crisis. The bridge loan of US$ 3 billion which usedto fund the acquisition of JLR was due on June 2009 and yet at the end of the year 2008, Tata

was only able to repay the US$ 1billion. The declining revenues and a tight credit conditions

was hurting the companys cash flow.

The questions arise is that whether Tata Motors able to repay the bridge loan? Will it be able

to build up investors confidence and increase sales in the future? Could Tata Motors survive

or going under bankruptcy? And we would analyze and discuss these further in the report.

Before we look into the reasons behind Tata Motors acquired JLR, let us take a look on what

makes Ford Motors to make the decision to sell JLR to Tata Motors.

Tata Group

The Tata group comprises over 100 operating companies in seven business sectors:

communications and information technology, engineering, materials, services, energy,

consumer products and chemicals. The group has operations in more than 80 countries across

six continents, and its companies export products and services to 85 countries.

The total revenue of Tata companies, taken together, was $83.3 billion (around Rs3,796.75

billion) in 2010-11, with 58 per cent of this coming from business outside India. Tatacompanies employ over 425,000 people worldwide. The Tata name has been respected in

India for more than 140 years for its adherence to strong values and business ethics.

Every Tata company or enterprise operates independently. Each of these companies has its

own board of directors and shareholders, to whom it is answerable. There are 31 publicly

listed Tata enterprises and they have a combined market capitalisation of about $89.02

billion (as on February 2, 2012), and a shareholder base of 3.6 million. The major Tata

companies are Tata Steel, Tata Motors, Tata Consultancy Services (TCS), Tata Power, Tata

Chemicals, Tata Global Beverages, Tata Teleservices, Titan, Tata Communications and

Indian Hotels.

Tata Steel is among the top ten steelmakers, and Tata Motors is among the top five

commercial vehicle manufacturers, in the world. TCS is a leading global software company,

with delivery centres in the US, UK, Hungary, Brazil, Uruguay and China, besides India.

Tata Global Beverages is the second-largest player in tea in the world. Tata Chemicals is the

worlds second-largest manufacturer of soda ash and Tata Communications is one of the


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worlds largest wholesale voice carriers. In tandem with the increasing international footprint

of Tata companies, the Tata brand is also gaining international recognition. Brand Finance, a

UK-based consultancy firm, valued the Tata brand at $15.75 billion in 2011 and ranked it

41st among the world's 100 most valuable brands. BusinessWeek magazine ranked Tata 17th

among the '50 Most Innovative Companies' list and the Reputation Institute, USA, in 2009rated it 11th on its list of the world's most reputable companies.

Founded by Jamsetji Tata in 1868, Tatas early years were inspired by the spirit of

nationalism. It pioneered several industries of national importance in India: steel, power,

hospitality and airlines. In more recent times, its pioneering spirit has been showcased by

companies such as TCS, Indias first software company, and Tata Motors, which made

Indias first indigenously developed car, the Indica, in 1998 and recently unveiled the

worlds lowest-cost car, the Tata Nano.

Tata companies have always believed in returning wealth to the society they serve. Two-

thirds of the equity of Tata Sons, the Tata promoter holding company, is held by philanthropic trusts that have created national institutions for science and technology,

medical research, social studies and the performing arts. The trusts also provide aid and

assistance to non-government organisations working in the areas of education, healthcare and

livelihoods. Tata companies also extend social welfare activities to communities around their

industrial units. The combined development-related expenditure of the trusts and the

companies amounts to around 3 per cent of the group's net profits in 2011.

Going forward, Tata is focusing on new technologies and innovation to drive its business in

India and internationally. The Nano car is one example, as is the Eka supercomputer

(developed by another Tata company), which in 2008 was ranked the worlds fourth fastest.

Anchored in India and wedded to traditional values and strong ethics, Tata companies are building multinational businesses that will achieve growth through excellence and

innovation, while balancing the interests of shareholders, employees and civil society.

Tata Motors Profile

Tata Motors Limited is India's largest automobile company, with consolidated revenues of

INR 1,23,133 crores (USD 27 billion) in 2010-11. It is the leader in commercial vehicles in

each segment, and among the top three in passenger vehicles with winning products in the

compact, midsize car and utility vehicle segments. The company is the world's fourth largest

truck manufacturer, and the world's third largest bus manufacturer.

The company's over 25,000 employees are guided by the vision to be ''best in the manner in

which we operate, best in the products we deliver, and best in our value system and ethics.''

Established in 1945, Tata Motors' presence indeed cuts across the length and breadth of

India. Over 6.5 million Tata vehicles ply on Indian roads, since the first rolled out in 1954.


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The company's manufacturing base in India is spread across Jamshedpur (Jharkhand), Pune

(Maharashtra), Lucknow (Uttar Pradesh), Pantnagar (Uttarakhand), Sanand (Gujarat) and

Dharwad (Karnataka). Following a strategic alliance with Fiat in 2005, it has set up an

industrial joint venture with Fiat Group Automobiles at Ranjangaon (Maharashtra) to

produce both Fiat and Tata cars and Fiat powertrains. The company's dealership, sales,services and spare parts network comprises over 3,500 touch points; Tata Motors also

distributes and markets Fiat branded cars in India.

Tata Motors, the first company from India's engineering sector to be listed in the New York

Stock Exchange (September 2004), has also emerged as an international automobile

company. Through subsidiaries and associate companies, Tata Motors has operations in the

UK, South Korea, Thailand, Spain and South Africa. Among them is Jaguar Land Rover, a

business comprising the two iconic British brands that was acquired in 2008. JLR supports

two state of the art engineering and design facilities and three manufacturing plants (Solihull,

Castle Bromwich & Halewood) in the UK. In 2004, Tata Motors acquired the Daewoo

Commercial Vehicles Company, South Korea's second largest truck maker. The rechristened

Tata Daewoo Commercial Vehicles Company has launched several new products in the

Korean market, while also exporting these products to several international markets. Today

two-thirds of heavy commercial vehicle exports out of South Korea are from Tata Daewoo.

In 2005, Tata Motors acquired a 21% stake in Hispano Carrocera, a reputed Spanish bus and

coach manufacturer, and subsequently the remaining stake in 2009. Hispano's presence is

being expanded in other markets. In 2006, Tata Motors formed a joint venture with the

Brazil-based Marcopolo, a global leader in body-building for buses and coaches to

manufacture fully-built buses and coaches for India and select international markets. In 2006,

Tata Motors entered into joint venture with Thonburi Automotive Assembly Plant Companyof Thailand to manufacture and market the company's pickup vehicles in Thailand. The new

plant of Tata Motors (Thailand) has begun production of the Xenon pickup truck, with the

Xenon having been launched in Thailand in 2008. Tata Motors (SA) (Proprietary) Ltd., Tata

Motors' joint venture with Tata Africa Holding (Pty) Ltd., has its assembly plant in South

Africa at Rosslyn, north of Pretoria, in the Gauteng province of South Africa. The plant can

assemble, from semi knocked down (SKD) kits, light, medium and heavy commercial

vehicles ranging from 4 - 50 tonnes.

Tata Motors is also expanding its international footprint, established through exports since

1961. The company's commercial and passenger vehicles are already being marketed in

several countries in Europe, Africa, the Middle East, South East Asia, South Asia, CIS,Russia and South America. It has franchisee/joint venture assembly operations in

Bangladesh, Ukraine, and Senegal.

The foundation of the company's growth over the last 65 years is a deep understanding of

economic stimuli and customer needs, and the ability to translate them into customer-desired


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offerings through leading edge R&D. With over 4,500 engineers and scientists, the

company's Engineering Research Centre, established in 1966, has enabled pioneering

technologies and products. The company today has R&D centres in Pune, Jamshedpur,

Lucknow, Dharwad in India, and in South Korea, Spain, and the UK. It was Tata Motors,

which developed the first indigenously developed Light Commercial Vehicle, India's firstSports Utility Vehicle and, in 1998, the Tata Indica, India's first fully indigenous passenger

car. Within two years of launch, Tata Indica became India's largest selling car in its segment.

In 2005, Tata Motors created a new segment by launching the Tata Ace, India's first

indigenously developed mini-truck.

In January 2008, Tata Motors unveiled its People's Car, the Tata Nano, which India and the

world have been looking forward to. The Tata Nano has been subsequently launched, as

planned, in India in March 2009. A development, which signifies a first for the global

automobile industry, the Nano brings the comfort and safety of a car within the reach of

thousands of families.

Designed with a family in mind, it has a roomy passenger compartment with generous leg

space and head room. It can comfortably seat four persons. Its mono-volume design will set a

new benchmark among small cars. Its safety performance exceeds regulatory requirements in

India. Its tailpipe emission performance too exceeds regulatory requirements. In terms of

overall pollutants, it has a lower pollution level than two-wheelers being manufactured in

India today. The lean design strategy has helped minimise weight, which helps maximise

performance per unit of energy consumed and delivers high fuel efficiency. The high fuel

efficiency also ensures that the car has low carbon dioxide emissions, thereby providing the

twin benefits of an affordable transportation solution with a low carbon footprint.

In May 2009, Tata Motors ushered in a new era in the Indian automobile industry, in keepingwith its pioneering tradition, by unveiling its new range of world standard trucks called

Prima. In their power, speed, carrying capacity, operating economy and trims, they will

introduce new benchmarks in India and match the best in the world in performance at a

lower life-cycle cost. In October 2010, Tata Motors launched the Tata Aria, the first Indian

four-wheel drive crossover. The Tata Aria redefines several benchmarks with its design and

technologies, offering class leading features that take comfort and safety to a new height.

Tata Motors is equally focussed on environment-friendly technologies in emissions and

alternative fuels. It has developed electric and hybrid vehicles both for personal and public

transportation. It has also been implementing several environment-friendly technologies inmanufacturing processes, significantly enhancing resource conservation.

Through its subsidiaries, the company is engaged in engineering and automotive solutions,

construction equipment manufacturing, automotive vehicle components manufacturing and

supply chain activities, machine tools and factory automation solutions, high-precision


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tooling and plastic and electronic components for automotive and computer applications, and

automotive retailing and service operations.

Tata Motors is committed to improving the quality of life of communities by working on

four thrust areas employability, education, health and environment. The activities touch the

lives of more than a million citizens. The company's support on education and employability

is focused on youth and women. They range from schools to technical education institutes to

actual facilitation of income generation. In health, our intervention is in both preventive and

curative health care. The goal of environment protection is achieved through tree plantation,

conserving water and creating new water bodies and, last but not the least, by introducing

appropriate technologies in our vehicles and operations for constantly enhancing

environment care.

With the foundation of its rich heritage, Tata Motors today is etching a refulgent future.

Acquisitions

In 2004 Tata Motors acquired Daewoo's truck manufacturing unit, now known as

Tata Daewoo Commercial Vehicle, in South Korea.

In 2005, Tata Motors acquired 21% of Aragonese Hispano Carrocera giving it

controlling rights of the company.

In 2007, Formed a joint venture with Marcopolo of Brazil and introduced low-floor

buses in the Indian Market.

In 2008, Tata Motors acquired British Jaguar Land Rover (JLR), which includes the

Daimler and Lanchester brand names. In 2010, Tata Motors acquired 80% stake in Italy-based design and engineering

company Trilix for a consideration of 1.85 million. The acquisition is in line with

the companys objective to enhance its styling/design capabilities to global standards.

Expansion

The 2nd generation Tata Indica V2's fuel economy, powerful engine and aggressive

marketing strategy made it one of the best selling cars in the history of the Indian automobile

industry.

After years of dominating the commercial vehicle market in India, Tata Motors entered the

passenger vehicle market in 1991 by launching the Tata Sierra, a multi utility vehicle. After

the launch of three more vehicles, Tata Estate (1992, a stationwagon design based on the

earlier 'TataMobile' (1989), a light commercial vehicle), Tata Sumo (LCV, 1994) and Tata

Safari (1998, India's first sports utility vehicle). Tata launched the Indica in 1998, the first


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fully indigenous passenger car of India. Though the car was initially panned by auto-

analysts, the car's excellent fuel economy, powerful engine and aggressive marketing

strategy made it one of the best selling cars in the history of the Indian automobile industry.

A newer version of the car, named Indica V2, was a major improvement over the previous

version and quickly became a mass-favorite. Tata Motors also successfully exported largequantities of the car to South Africa. The success of Indica in many ways marked the rise of

Tata Motors.

Tata Daewoo C ommercial Vehicle Main article: Tata Daewoo Commercial Vehicle

Tata Motors aimed to increase its presence worldwide. In 2004, it acquired the Daewoo

Commercial Vehicle Company of South Korea. The reasons behind the acquisition were:

Company's global plans to reduce domestic exposure. The domestic commercial vehicle

market is highly cyclical in nature and prone to fluctuations in the domestic economy. Tata

Motors has a high domestic exposure of ~94% in the MHCV segment and ~84% in the light

commercial vehicle (LCV) segment. Since the domestic commercial vehicle sales of thecompany are at the mercy of the structural economic factors, it is increasingly looking at the

international markets. The company plans to diversify into various markets across the world

in both MHCV as well as LCV segments.

To expand the product portfolio Tata Motors recently introduced the 25MT GVW Tata

Novus from Daewoos (South Korea) (TDCV) platform. Tata plans to leverage on the strong

presence of TDCV in the heavy-tonnage range and introduce products in India at an

appropriate time. This was mainly to cater to the international market and also to cater to the

domestic market where a major improvement in the Road infrastructure was done through

the National Highway Development Project.Tata remains India's largest heavy commercial vehicle manufacturer and Tata Daewoo is the

2nd largest heavy commercial vehicle manufacturer in South Korea. Tata Motors has jointly

worked with Tata Daewoo to develop trucks such as Novus and World Truck and buses

namely, GloBus and StarBus.

Hispano Carrocera - Main article: Hispano Carrocera

In 2005, sensing an opportunity in the fully built bus segment, Tata Motors acquired a 21%

stake in Hispano Carrocera SA,the leading European bus and coach cabin maker. In 2009,

the company picked up the remaining 79% stake in Hispano Carrocera SA for an undisclosed

sum, making it a fully owned subsidiary.Joint ventures

Tata MarcoPolo released a low-floor bus in India and now it is widely used as public

transport in Delhi, Mumbai,Pune, Chennai, Hyderabad, Bangalore, Chandigarh and

Lucknow.


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Tata Motors has formed a 51:49 joint venture in bus body building with Marcopolo of Brazil.

This joint venture is to manufacture and assemble fully built buses and coaches targeted at

developing mass rapid transportation systems. The joint venture will absorb technology and

expertise in chassis and aggregates from Tata Motors, and Marcopolo will provide know-

how in processes and systems for bodybuilding and bus body design. Tata and Marcopolohave launched a low-floor city bus which is widely used by Chennai, Coimbatore, Delhi,

Mumbai, Lucknow, Pune, Kochin, Trivandrum and Bengaluru transport corporations. Its

manufacturing facility is based in Dharwad.

Tata Motors also formed a joint venture with Fiat and gained access to Fiats diesel engine

technology. Tata Motors sells Fiat cars in India through a 50/50 joint venture Fiat

Automobiles India Limited, and is looking to extend its relationship with Fiat and Iveco to

other segments. Tata has also formed several JV's with many small companies in various

countries around the world.

Important developmentsTata Nano-Main article: Tata Nano

In January 2008, Tata Motors launched Tata Nano, the least expensive production car in the

world at about 120,000 (US $3000).The city car was unveiled during the Auto Expo 2008

exhibition in Pragati Maidan, New Delhi.

Tata has faced controversy over developing the Nano as some environmentalists are

concerned that the launch of such a low-priced car could lead to mass motorization in India

with adverse effects on pollution and global warming. Tata had set up a factory in Sanand,

Gujarat and the first Nanos were rolled out in summer 2009.

Tata Nano Europa had been developed for sale in developed economies and it hit markets in2010 while the normal Nano had hit markets in South Africa, Kenya and countries in Asia

and Africa by late 2009. A battery version is also planned.

Tata Ace-Main article: Tata Ace

Tata Ace, India's first indigenously developed sub-one ton mini-truck, was launched in May

2005. The mini-truck was a huge success in India with auto-analysts claiming that Ace had

changed the dynamics of the light commercial vehicle (LCV) market in the country by

creating a new market segment termed the small commercial vehicle (SCV) segment. Ace

rapidly emerged as the first choice for transporters and single truck owners for city and rural

transport. By October 2005, LCV sales of Tata Motors had grown by 36.6 percent to 28,537units due to the rising demand for Ace. The Ace was built with a load body produced by

Autoline Industries.By 2005, Autoline was producing 300 load bodies per day for Tata

Motors. Ace is still a top seller for TML with 5 lakh units sold to date (June 2010).


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Ace has also been exported to several Asian, European, South American and African

countries and all-electric models are sold through Chrysler's Global Electric Motorcars

division.In Sri Lanka it is sold through Diesel & Motor Engineering(DIMO) PLC under the

name of DIMO Batta.

Compressed air car - Main article: Tata OneCAT

Motor Development International of France has developed the world's first prototype of a

compressed air car, named OneCAT. In 2007, MDI owner Guy Negre was reported to have

"the backing of Tata".

It has airtanks that can be filled in 4 hours by plugging the car into a standard electrical plug.

In 2008 MDI planned to also design a gas station compressor, which would fill the tanks in 3

minutes.There are no gasoline costs and no fossil fuel emissions from the vehicle when run

in town, but "the compressed air driving the pistons can be boosted by a fuel burner".

OneCAT is a five seat vehicle with a 200-litre (7.1 cu ft) trunk. With full tanks it is said to

run at 100 km/h (62 mph) for 90 kilometres (56 mi) range in urban cycle. There are severe

physical arguments pleading against those figures. In December 2009 Tata's vice president of

engineering systems confirmed that the limited range and low engine temperatures were

causing difficulties.

Operations

This article appears to be written like an advertisement. Please help improve it by rewriting

promotional content from a neutral point of view and removing any inappropriate external

links. (May 2010)The Tata Safari DiCOR is one of Tata's best selling vehicles in India and

also has been fairly successful in the Mediterranean and Eastern EuropeTata has tried to

revamp all its models in order to satisfy the consumer. The purchase of Jaguar and LandRover is expected to help give Tata Motors gain a foothold in the European and American

markets.Tata relies on its subsidiaries for sales outside India. Seen here is the Range Rover

Sport. Tata Xenon is Tata's bestselling vehicle in Europe.

Tata in India

A loaded Tata truck on a Rajasthan highway Tata Motors Limited is Indias largest

automobile company, with revenues of 35,651.48 crore (US$7.84 billion) in 200708.It is

the leader in commercial vehicles in each segment, and among the top three in passenger

vehicles in India with products in the compact, midsize car and utility vehicle segments.Tata

vehicles are sold primarily in India, and over 4 million Tata vehicles have been produceddomestically since the first Tata vehicle was assembled in 1954. The companys

manufacturing base in India is spread across Jamshedpur (Jharkhand), Pune (Maharashtra),

Lucknow (Uttar Pradesh), Pantnagar (Uttarakhand) and Dharwad (Karnataka). Following a

strategic alliance with Fiat in 2005, Tata set up an industrial joint venture with Fiat Group


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Automobiles at Ranjangaon (Maharashtra) to produce both Fiat and Tata cars and Fiat

powertrains. The company is establishing a new plant at Sanand (Gujarat). Tata's dealership,

sales, service and spare parts network comprises over 3500 touch points. Tata Motors also

distributes and markets Fiat branded cars in India.

Sales & Service Network-Tata Motors has more than 250 dealerships in more than 195 cities

across 27 states and 4 Union Territories of India.It has the 3rd largest Sales and Service

Network after Maruti Suzuki and Hyundai.

Tata's global operations

Tata Motors has been in the process of acquiring foreign brands to increase its global

presence. Through acquisition, Tata has operations in the UK, South Korea, Thailand and

Spain. Among these acquisitions is Jaguar Land Rover, a business comprising two struggling

iconic British brands that was acquired from the Ford Motor Company in 2008. In 2004, Tata

acquired the Daewoo Commercial Vehicles Company, South Koreas second largest truck

maker. The re-branded Tata Daewoo Commercial Vehicles Company has launched severalnew products in the Korean market, while also exporting these products to several

international markets. Today two-thirds of heavy commercial vehicle exports out of South

Korea are from Tata Daewoo.

In 2005, Tata Motors acquired a 21% controlling stake in Hispano Carrocera, a Spanish bus

and coach manufacturer.Tata Motors continued its market area expansion through the

introduction of new products such as buses (Starbus & Globus, jointly developed with

subsidiary Hispano Carrocera) and trucks (Novus, jointly developed with subsidiary Tata

Daewoo). In May, 2009 Tata unveiled the Tata World Truck range jointly developed with

Tata Daewoo Debuting in South Korea, South Africa, the SAARC countries and the Middle-East by the end of 2009 santhosh In 2006, Tata formed a joint venture with the Brazil-based

Marcopolo to manufacture fully built buses and coaches for India and other international

markets.Tata Motors has expanded its production and assembly operations to several other

countries including South Korea, Thailand, South Africa and Argentina and is planning to set

up plants in Turkey, Indonesia and Eastern Europe.

Tata also has franchisee/joint venture assembly operations in Kenya, Bangladesh, Ukraine,

Russia and Senegal.Tata has dealerships in 26 countries across 4 continents.Though Tata is

present in many countries it has only managed to create a large consumer base in the Indian

Subcontinent, namely India, Bangladesh, Bhutan, Sri Lanka and Nepal. Tata has a growing

consumer base in Italy, Spain and South Africa.

Jaguar Cars and Land Rover

After the acquisition of the British Jaguar Land Rover (JLR) business, which also includes

the Daimler, Lanchester and Rover brands, Tata Motors became a major player in the

international automobile market. On 27 March 2008, Tata Motors reached an agreement with


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Ford to purchase their Jaguar Land Rover operations for US$2.3 billion. The sale was

completed on 2 June 2008.

In addition to the brands, Tata Motors has also gained access to two design centres and two

plants in UK. The key acquisition would be of the intellectual property rights related to the

technologies.

Land Rover Profile

History

Land Rover Series I

Land Rover Series IIa 88

The design for the original Land Rover vehicle was started in 1947 by Maurice Wilks, chief

designer at the Rover Company, on his farm in Newborough, Anglesey. It is said that he was

inspired by an American World War II Jeep that he used one summer at his holiday home in

Wales.The first Land Rover prototype, later nicknamed 'Centre Steer', was built on a Jeep

chassis.

The early choice of colour was dictated by military surplus supplies of aircraft cockpit paint,

so early vehicles only came in various shades of light green; all models until recently feature

sturdy box section ladder-frame chassis.

The early vehicles, such as the Series I, were field-tested at Long Bennington and designedto be field-serviced; advertisements for Rovers cite vehicles driven thousands of miles on

banana oil. Now with more complex service requirements this is less of an option. The

British Army maintains the use of the mechanically simple 2.5-litre four-cylinder 300TDi-

engined versions rather than the electronically controlled 2.5-litre five-cylinder TD5 to retain

some servicing simplicity. This engine also continued in use in some export markets using

units built at a Ford plant in Brazil, where Land Rovers were built under license and the

engine was also used in Ford pick-up trucks built locally.

Production of the TDi engine ended in the United Kingdom in 2006, meaning that Land

Rover no longer offers it as an option. International Motors of Brazil offer an engine called

the 2.8 TGV Power Torque, which is essentially a 2.8-litre version of the 300TDi, with a

corresponding increase in power and torque. All power is combined with an All-Terrain

Traction Control which gives active terrain response; Ferrari uses a similar system in race

traction.


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During its ownership by Ford, Land Rover was associated with Jaguar. In many countries

they shared a common sales and distribution network (including shared dealerships), and

some models shared components and production facilities.

Sale to Tata

On 11 June 2007, Ford Motor Company announced its plan to sell Land Rover, along with

Jaguar. Ford retained the services of Goldman Sachs, Morgan Stanley and HSBC to advise it

on the details of the deal. The buyer was initially expected to be announced by September

2007, but the sale was delayed and an announcement was not made until March 2008. A UK-

based private equity firm, Alchemy Partners, and the India-headquartered Tata Motors and

Mahindra and Mahindra expressed interest in purchasing Jaguar and Land Rover from the

Ford Motor Company.

Before the sale was announced, Anthony Bamford, chairman of British excavators

manufacturer JCB, had expressed interest in purchasing Jaguar Cars in August, the year

previously; only to back out when told the sale would also involve Land Rover, which he didnot wish to buy. Tata Motors received endorsements from the Transport and General

Workers' Union (TGWU)-Amicus combine and Ford as a preferred bidder.

On 26 March 2008, Ford announced that it had agreed to sell its Jaguar and Land Rover

operations to Tata Motors, and that the sale was expected to be completed by the end of the

second quarter of 2008.On 2 June 2008, the sale to Tata Motors was completed by both

parties.Included in the deal were the rights to three other British brands: Jaguar's own

Daimler, as well as two dormant brands Lanchester and Rover.BMW and Ford had

previously retained ownership of the Rover brand to protect the integrity of the Land Rover

brand, with which 'Rover' might be confused in the US 4x4 market; the Rover brand wasoriginally used under license by MG Rover until it collapsed in 2005, at which point it was

re-acquired by the then Ford Motor Company owned Land Rover Limited.

Timeline

A Land Rover dealership in San Jose, California

1947: Rover's chief designer Maurice Wilks and his associates create a prototype for

a new off-road vehicle

1948: The first Land Rover was officially launched the 30th April, 1948, at the

Amsterdam Motor Show

1958: Series II launched

1961: Series IIA began production

1967: Rover becomes part of Leyland Motors Ltd, later British Leyland (BL) as

Rover Triumph


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1970: Introduction of the Range Rover

1971: Series III launched

1975: BL collapses and is nationalised, publication of the Ryder Report recommends

that Land Rover be split from Rover and be treated as a separate company within BLand becomes part of the new commercial vehicle division called the Land Rover

Leyland Group

1976: One-millionth Land Rover leaves the production line

1978: Land Rover Limited formed as a separate subsidiary of British Leyland

1980: Rover car production ends at Solihull with the transfer of SD1 production to

Cowley, Oxford; Solihull is now exclusively for Land Rover manufacture. 5-door

Range Rover introduced.

1983: Land Rover 90 (Ninety)/110 (One-Ten)/127 (renamed Defender in 1990)

introduced

1986: BL plc becomes Rover Group plc; Project Llama started

1988: Rover Group is privatised and becomes part of British Aerospace, and is now

known simply as Rover

1986: Range Rover is introduced to the U.S market in April 1986

1989: Introduction of the Discovery

1994: Rover Group is taken over by BMW. Introduction of second-generation Range

Rover. (The original Range Rover was continued under the name 'Range Rover

Classic' until 1995) 1997: Land Rover introduces the Special Edition Discovery XD with AA Yellow

paint, subdued wheels, SD type roof racks, and a few other off-road upgrades directly

from the factory. Produced only for the North American market, the Special Vehicles

Division of Land Rover created only 250 of these bright yellow SUV's. Official

formation of the Camel Trophy Owners Club by co-founders Neill Browne, Pantelis

Giamarellos and Peter Sweetser.

1997: Introduction of the Freelander

1998: Introduction of the second generation of Discovery

2000: BMW breaks up the Rover Group and sells Land Rover to Ford for 1.8 billion

2002: Introduction of third-generation Range Rover

2004: Introduction of the third-generation Discovery/LR3

2005: Introduction of Range Rover Sport


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2005: Adoption of the Jaguar AJ-V8 engine to replace the BMW M62 V8 in the

Range Rover

2005: Land Rover 'founder' Rover, collapses under the ownership of MG Rover

Group

2006: Announcement of a new 2.4-litre diesel engine, 6-speed gearbox, dash and

forward-facing rear seats for Defender. Introduction of second generation of

Freelander (Freelander 2). Ford acquires the Rover trademark from BMW, who

previously licensed its use to MG Rover Group

2007: 4,000,000th Land Rover rolls off the production line, a Discovery 3 (LR3),

donated to The Born Free Foundation

2007: Announcement from the Ford Motor Company that it plans to sell Land Rover

and also Jaguar Cars

2007: India's Tata Motors and Mahindra and Mahindra as well as financial sponsorsCerberus Capital Management, TPG Capital and Apollo Global Management

expressed their interest in purchasing Jaguar Cars and Land Rover from the Ford

Motor Company.

2008: Ford agreed to sell their Jaguar Land Rover operations to Tata Motors.

2008:Tata Motors finalised their purchase of Jaguar and Land Rover from Ford.

Jaguar Profile

History

The 2.5-litre, 68 hp 1935 SS 90

The Swallow Sidecar Company was founded in 1922 by two motorcycle enthusiasts,

William Lyons and William Walmsley. In 1935 the SS Jaguar name first appeared on a 2.5-

litre saloon, sports models of which were the SS 90 and SS 100.


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Cash was short after World War II, and Jaguar sold the plant and premises of Motor Panels, a

pressed steel body manufacturing company they had acquired in the late 1930s when growth

prospects seemed more secure. The buyer was Rubery Owen.Nevertheless, Jaguar achieved

relative commercial success with their early post war models; times were also tough for other

Coventry-based auto-makers and the company was able to buy from John Black's StandardMotor Company the plant where Standard had built the six-cylinder engines it had been

supplying to Jaguar.

SS and Jaguar made 3.5-litre, 125 hp Mk IV drophead coup

Jaguar made its name by producing a series of eye-catching sports cars, such as the XK 120

of 1949, developed into XK 140 and XK 150, and the E Type (or XKE in the US) of 1961.

These were all successful and embodied Lyons' mantra of "value for money". They were

successful in international motorsport, a path followed in the 1950s to prove the engineering

integrity of the company's products.

Jaguar's sales slogan for years was "Grace, Space, Pace", a mantra epitomised by the recordsales achieved by the MK VII, IX, Mks I and II saloons and later the XJ6.

The core of Bill Lyons' success following WWII was the Twin Cam Straight Six Cylinder

Enginea design conceived pre-War and realised while design staff at the Coventry plant

were dividing their time between fire-watching (Coventry being a prime Luftwaffe target)

and designing the new power plant.

To place this in context, benchmark for pre-war racing and competition engines was the

"Double Knocker", or Twin Cam engine. Jaguar's new engine was a hemispherical cross-

flow cylinder head with valves inclined from the vertical; originally at 30 degrees (inlet) and

45 degrees (exhaust) and later standardised to 45 degrees for both inlet and exhaust.XK engine in an E-Type

As fuel octane ratings were relatively low from 1948 onwards, three piston configuration

were offered: Domed (High Octane), Flat (Medium Octane), and Dished (Low Octane).

The main designer, William "Bill" Heynes, assisted by Walter "Wally" Hassan, was

determined to design the Twin OHC unit. Bill Lyons agreed over misgivings from Hassan.

The sheer concept of applying what had hitherto been considered a racing or low-volume and

cantankerous engine, needing constant fettling into reasonable volume production saloon

cars was brave.

The subsequent engine (in various versions) was the mainstay powerplant of Jaguar, used in

the XK 120, Mk VII Saloon, Mk I and II Saloons and XK 140 and 150. It was also employed

in the E Type, itself a development from the race winning and Le Mans conquering C and D

Type Sports Racing cars refined as the short-lived XKSS, a road-legal D Type.


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Few engines have demonstrated such ubiquity and longevity: Jaguar used the Twin OHC XK

Engine, as it came to be known, in the Jaguar XJ6 saloon from 1969 through 1992, and

employed in a J60 variant as the power plant in such diverse vehicles as the British Army's

Scorpion Light Armoured Combat Reconnaissance Vehicle and its several variants, as well

as the Fox Milan reconnaissance and Fox Scout armoured vehicles, the Ferret Scout Car, andthe Stonefield four-wheel-drive all-terrain lorry. Properly maintained, the standard

production XK Engine would achieve 200,000 miles of useful life.

The distinctive "leaping Jaguar" mascot

Two of the proudest moments in Jaguar's long history in motor sport involved winning the

Le Mans 24 hours race, firstly in 1951 and again in 1953. The 1955 victory was somewhat

overshadowed by the tragic events that occurred. Later in the hands of the Scottish racing

team Ecurie Ecosse two more wins were added in 1956 and 1957.

In spite of such a performance orientation, it was always Lyons' intention to build the

business by producing world-class sporting saloons in larger numbers than the sports carmarket could support. Jaguar secured financial stability and a reputation for excellence with

a series of elegantly styled luxury saloons that included the 3 & 3 litre cars, the Mark VII,

VIII, and IX, the compact Mark I and 2, and the XJ6 and XJ12. All were deemed very good

values, with comfortable rides, good handling, high performance, and great style.

Combined with the trend-setting XK 120, XK 140, and XK 150 series of sports car, and

nonpareil E-Type,[citation needed] Jaguar's elan as a prestige motorcar manufacturer had

few rivals. The company's post-War achievements are remarkable, considering both the

shortages that rove Britain (the Ministry of Supply still allocated raw materials) and the state

of metallurgical development of the era.In 1951, Jaguar leased Browns Lane from The Daimler Motor Company Limited, which

quickly became its principal plant.Jaguar purchased Daimlernot to be confused with

Daimler-Benz or Daimler AGin 1960 from the holding company BSA. From the late

1960s, Jaguar used the Daimler marque as a brand name for their most luxurious saloons.

British Leyland

Jaguar merged with the British Motor Corporation (BMC), the Austin-Morris combine, to

form British Motor Holdings (BMH) in 1966. After merging with Leyland, which had

already taken over Rover and Standard Triumph, the resultant company then became the

British Leyland Motor Corporation (BLMC) in 1968. Financial difficulties and thepublication of the Ryder Report led to effective nationalisation in 1975 and the company

became British Leyland, Ltd (later simply BL plc).

In the 1970s, the Jaguar and Daimler marques formed part of BL's specialist car division or

Jaguar Rover Triumph Ltd until a restructure in the early 1980s saw most of the BL volume


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car manufacturing side becoming the Austin Rover Group, which didn't include Jaguar. In

1984, Jaguar was floated off as a separate company on the stock market one of the

Thatcher government's many privatisations.

Ford Motor Company era

Jaguar S-Type based on the Ford DEW98 platform-Ford made offers to Jaguar's US and UK

shareholders to buy their shares in November 1989; Jaguar's listing on the London Stock

Exchange was removed on 28 February 1990.In 1999 it became part of Ford's new Premier

Automotive Group along with Aston Martin, Volvo Cars and, from 2000, Land Rover. Aston

Martin was subsequently sold off in 2007. Between Ford purchasing Jaguar in 1989 and

selling it in 2008 it did not earn any profit for the Dearborn-based auto manufacturer.

Under Ford's ownership Jaguar expanded its range of products with the launch of the S-Type

in 1999 and X-type in 2001. Since Land Rover's May 2000 purchase by Ford, it has been

closely associated with Jaguar. In many countries they share a common sales and distribution

network (including shared dealerships), and some models now share components, althoughthe only shared production facility was Halewood, for the X-Type and the Freelander 2.

However operationally the two companies were effectively integrated under a common

management structure within Ford's PAG.

On 11 June 2007, Ford announced that it planned to sell Jaguar, along with Land Rover and

retained the services of Goldman Sachs, Morgan Stanley and HSBC to advise it on the deal.

The sale was initially expected to be announced by September 2007, but was delayed until

March 2008. Private equity firms such as Alchemy Partners of the UK, TPG Capital,

Ripplewood Holdings (which hired former Ford Europe executive Sir Nick Scheele to head

its bid), Cerberus Capital Management and One Equity Partners (owned by JP Morgan Chaseand managed by former Ford executive Jacques Nasser) of the US, Tata Motors of India and

a consortium comprising Mahindra and Mahindra (an auto manufacturer from India) and

Apollo Management all initially expressed interest in purchasing the marques from the Ford

Motor Company.

Before the sale was announced, Anthony Bamford, chairman of British excavator

manufacturer JCB had expressed interest in purchasing the company in August 2006,but

backed out upon learning that the sale would also involve Land Rover, which he did not wish

to buy. On Christmas Eve of 2007, Mahindra and Mahindra backed out of the race for both

brands, citing complexities in the deal.

Tata Motors era


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On 1 January 2008, Ford formally declared that Tata was the preferred bidder.Tata Motors

also received endorsements from the Transport And General Worker's Union (TGWU)-

Amicus combine as well as from Ford.According to the rules of the auction process, this

announcement would not automatically disqualify any other potential suitor. However, Ford

(as well as representatives of Unite) would now be able to enter into detailed discussionswith Tata concerning issues ranging from labour concerns (job security and pensions),

technology (IT systems and engine production) and intellectual property,as well as the final

sale price.Ford would also open its books for a more comprehensive due diligence by

Tata.On 18 March 2008, Reuters reported that American bankers Citigroup and JP Morgan

would finance the deal with a USD 3 billion loan.

On 26 March 2008, Ford announced that it had agreed to sell its Jaguar and Land Rover

operations to Tata Motors of India, and that they expected to complete the sale by the end of

the second quarter of 2008.Included in the deal were the rights to three other British brands,

Jaguar's own Daimler, as well as two dormant brands Lanchester and Rover.On 2 June 2008,

the sale to Tata was completed at a cost of 1.7 billion.

Acquisition of jaguar and land rover

In June 2008, India-based Tata Motors Ltd. announced that it had completed the acquisition

of the two iconic British brands - Jaguar and Land Rover (JLR) from the US-based Ford


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Motors for US$ 2.3 billion. Forming a part of the purchase consideration were JLR's

manufacturing plants, two advanced design centers in the UK, national sales companies

spanning across the world, and also licenses of all necessary intellectual property rights.

There was widespread skepticism in market over an Indian company owning the luxury

brands. According to industry analysts, some of the issues that could trouble Tata Motors

were economic slowdown in European and American markets, funding risks, currency risks

etc. Market conditions were extremely tough, especially in the key US market. Tatas needed

to invest a lot in brand building to make JLR profitable. Onset of recession not only made

investment look mistimed, but also started wiping out the JLR market.

TATA - JLR deal

Tata had completed this biggest buy-out in the automobile space by an Indian company on

June 2, 2008 as it bought the ownership of luxury brands - Jaguar and Land Rover. The deal

included the purchase of JLR's manufacturing plants, two advanced design centers in the

UK, national sales companies spanning across the world and also licenses of all necessaryintellectual property rights.

Tata Motors was interested in acquiring JLR as it will reduce the companys dependence on

the Indian market, which accounted for 90% of its sales. Morgan Stanley reported that JLRs

acquisition appeared negative for Tata Motors, as it had increased the earnings volatility,

given the difficult economic conditions in the key markets of JLR including the US and

Europe.

Tata Motors raised $3 billion (about Rs 12,000 crore) through bridge loans for 15 months

from a clutch of banks, including JP Morgan, Citigroup, and State Bank of India. Tata came

under cash crisis because of the Corus deal and the huge investments in the TATA Nanoproject which itself was surrounded in a lot of uncertainties. The credit rating companies also

took a negative outlook toward this deal because of the huge debt requirement to complete

the deal.

Ford Motors Company (Ford) is a leading automaker and the third largest multinational

corporation in the automobile industry. The company acquired Jaguar from British Leyland

Limited in 1989 for US$ 2.5 billion. After Ford acquired Jaguar, adverse economic

conditions worldwide in the 1990s led to tough market conditions and a decrease in the

demand for luxury cars. The sales of Jaguar in many markets declined, but in some markets

like Japan, Germany, and Italy, it still recorded high sales. In March 1999, Ford established

the PAG with Aston Martin, Jaguar, and Lincoln. During the year, Volvo was acquired for

US$ 6.45 billion, and it also became a part of the PAG.

In September 2006, Allan Mulally (Mulally), President and CEO of Ford, as part of the

restructuring exercise called the Way Forward' plan decided to dismantle the PAG. In

March 2007, Ford sold the Aston Martin sports car unit for US$ 931 million. In June 2007,


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Ford announced that it was considering selling JLR. After failing to re-brand and integrate

these luxury brands with its product portfolio, Ford Motors felt that acquisition was not the

right way of penetrating into the upscale segment.

Why did TATA go for JLR?

Tata Motors had several major international acquisitions to its credit. It had acquired Tetley,

South Korea-based Daewoo's commercial vehicle unit, and Anglo-Dutch Steel maker Corus

(Refer to Exhibit I for the details of the group's international acquisitions). Tata Motors'

long-term strategy included consolidating its position in the domestic Indian market and

expanding its international footprint by leveraging on in-house capabilities and products and

also through acquisitions and strategic collaborations.

On acquiring JLR, Ratan Tata, Chairman, Tata Group, said, "We are very pleased at the

prospect of Jaguar and Land Rover being a significant part of our automotive business. We

have enormous respect for the two brands and will endeavor to preserve and build on their

heritage and competitiveness, keeping their identities intact. We aim to support their growth,while holding true to our principles of allowing the management and employees to bring

their experience and expertise to bear on the growth of the business."

Tata Motors stood to gain on several fronts from the deal. One, the acquisition would help

the company acquire a global footprint and enter the high-end premier segment of the global

automobile market. After the acquisition, Tata Motors would own the world's cheapest car -

the US$ 2,500 Nano, and luxury marquees like the Jaguar and Land Rover.

Two, Tata also got two advance design studios and technology as part of the deal. This

would provide Tata Motors access to latest technology which would also allow Tata to

improve their core products in India, for eg, Indica and Safari suffered from internal noiseand vibration problems.

Three, this deal provided Tata an instant recognition and credibility across globe which

would otherwise would have taken years.

Four, the cost competitive advantage as Corus was the main supplier of automotive high

grade steel to JLR and other automobile industry in US and Europe. This would have

provided a synergy for TATA Group on a whole. The whole cost synergy that can be created

can be seen in the following diagram.

Five, in the long run TATA Motors will surely diversify its present dependence on Indian

markets (which contributed to 90% of TATAs revenue). Along with it due to TATAs


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footprints in South East Asia will help JLR do diversify its geographic dependence from US

(30% of volumes) and Western Europe (55% of volumes).

Analysts were of the view that the acquisition of JLR, which had a global presence and a

repertoire of well established brands, would help Tata Motors become one of the major

players in the global automobile industry.

Is deal really worth it?

Morgan Stanley reported that JLRs acquisition appeared negative for Tata Motors, as it had

increased the earnings volatility, given the difficult economic conditions in the key markets

of JLR including the US and Europe. Moreover, Tata Motors had to incur a huge capital

expenditure as it planned to invest another US$ 1 billion in JLR. This was in addition to the

US$ 2.3 billion it had spent on the acquisition. Tata Motors had also incurred huge capital

expenditure on the development and launch of the small car Nano and on a joint venture with

Fiat to manufacture some of the companys vehicles in India and Thailand. This, coupled

with the downturn in the global automobile industry, was expected to impact the profitabilityof the company in the near future.

Worldwide car sales are down 5% as compared to the previous year. The automobile

industry the world over is rationalizing production facilities, reducing costs wherever

possible, consolidating brands and dropping model lines and deferring R&D projects to

conserve funds.

The Chinese and Indian domestic markets for cars have been exceptions. While China has

witnessed a significant reduction in its automotive-related exports and supplies to automobile

companies, the Chinese domestic car market has grown by 7%. In India the passenger car

market has remained more or less flat compared to the previous year.Since then, its fortunes have been unsure, as the slump in demand for automobiles has

depressed its revenues at the same time Tata has invested nearly $400 million in the Nano

launch and struggled to pay off the expensive $3 billion loans it racked up for the

Jaguar/Land Rover shopping bill. Within the space of a year, Tata Motors has gone from

being a developing-world success story to a cautionary tale of bad timing and overly

ambitious expansion plans.

Tata Motors' standalone Indian operations' profits declined by 51% in 2008-09 over the

previous year.All through the fiscal year ended March 2009 the company bled money, losing

a record $517 million on $14.7 billion in revenues, just on its India operations. Jaguar andLand Rover lost an additional $510 million in the 10 months Tata owned it until March 2009.

In January 2009, Tata Motors announced that due to lack of funds it may be forced to roll

over a part of the US$ 3 billion bridge loan after having repaid around US$ 1 billion. The


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financial burden on Tata Motors was expected to increase further with the pension liability of

JLR coming up for evaluation in April 2009.

Disadvantages by not going for this acquisition?There was immense pressure from the shareholders, analysts community etc. to abort the

deal as they unanimously agreed that it was over priced and the balance sheet of TATA was

not in a position to absorb more loan (as discussed in the previous section). Ford purchased

JLR at $5 bn and sold at almost half the price to TATA after operating it for losses for few

years. As the market would have recovered from recession the valuation would have

increased since there would have been growth in the demand of JLR thus creating more

problems for TAMO. Tata would not have been able enter into the premium segment (>10

lakhs) in India. TAMO would have lacked in robust designing capabilities. Above all, at that

time no other major automobile brand was available for acquisition with such designing and

R&D capabilities.


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Conclusion

According to Tata Motors annual report for the year 2008- 2009, the year under review

would be viewed as in great despondency. The Company faces a major decline in demand

across its product range; it must bear the burden of the major acquisition of JLR, and faced

with a major collapse in vehicle demand in Western Europe and the U.S. But to many in the

Company this is yet another year of challenges with the excitement of meeting such

challenges head-on.

The spirit, commitment and dedication of the whole Tata Motors team at all its locations

and across all levels are truly phenomenal and this continues to be the company's greatest

asset. I feel confident that if we can sustain our operations through this difficult period,

taking whatever steps we need to take to see the year through, we could overcome all the

obstacles in our path. I feel strongly that in later years we can look back on the JLRacquisition and say to ourselves that this was a very worthwhile strategic acquisition and one

which has brought us considerable technology and global presence Reported in Chairmans

Statement by Mr. Ratan N Tata.

We believe that Tata Motors will surely rebound since it has the great leadership under Ratan

Tata who has successfully managed to sail through many adversities in the past and bring

Tata Motors to the global stage.

Project of Acqutition of Jaguar

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