2015-2016

PROJECT REPORT ON

JAGUAR: CASE STUDY

SUBJECT: MANAGERIAL ECONOMICS SUBMITTED BY

PRANESH MISHRA (A-24)SANKET KOLEKAR (A-21)RAJ SHEKAR PASHAM (A-29)KEDAR GAONKAR (A-05)ABHISHEK BHATTACHARJEE (B-02)SUBMITTED TO

Prof. T.G. ROY

ACKNOWLEDGMENT

We take this opportunity to thank H.K.INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH for giving us this opportunity to work on such an experiential project.

We express our sincere gratitude to PROF. T.G. ROY for his constant support help and motivation in completing this project. We felt motivated and encouraged every time. Without your encouragement and guidance this project would not have materialized. Without his innovative style of teaching and sharing immense knowledge we would have not been able to know and learn and work on this project.

The guidance and support received from all the people, who contributed their knowledge to this project, was vital for the success for the project. We are greatful for their constant support and help.

Thank you. CONTENT

SUMMMARY HISTORY OF AUTOMOBILEThe LEADERS IN AUTO INDUSTRYAUTOMOBILE IN INDIAFORD MOTOR COMPANY

JAGUAR COMPANY

TATA MOTOR COMPANY

DIFFRENCE MODELS OF JAGUAR

WHY DID FORD SOLD JAGUAR LAND ROVER TO TATA MOTORS?

TATAS ACQUISITION & IMPLEMENTATION OF IMPROVED PLANS. WHAT WAS THE IMPACT ON REVENCE & PROFIT?

IS JAGUARS SUCCEES MAKING TATA MOTORS THINK OF BECOMMING A GLOBAL BRAND?

BALANCE SHEET OF TATA MOTORS 2015RECOMMEDATIONCONCLUSION

BIOGRAPHY

SummaryThis project is the case study based on automobile company named as Tata Motors which acquired Jaguar for globalizing its brand.

Jaguar was under Ford motors, but Tata acquired JLR.

This project explains the history of Jaguar, post acquisition by Tata motors.

The main objective of this project report is to understand the case study of jaguar, & understand why Tata acquired Jaguar when it was not providing profit to Ford.

For this project Financial Statements was analyzed and secondary research was done.

The purpose was to know the economic factors of Tata motors for acquiring Jaguar.

HISTORY OF AUTOMOBILE History of the automobilebegins as early as 1769, with the creation of steam-powered automobiles capable ofhuman transport IN 1806.

The first cars powered byinternal combustion enginesrunning onfuel gas appeared, which led to the introduction in 1885 of the ubiquitous modern gasoline or petrol-fueled internal combustion engine.

THE Leaders in Auto Industry

Automobile in indiaThe Indian auto industry is one of the largest in the world with an annual production of 23.37 million vehicles in FY 2014-15, following a growth of 8.68 per cent over the last year.

The automobile industry accounts for 7.1 per cent of the country's gross domestic product (GDP).

The Two Wheelers segment with 81 per cent market share is the leader of the Indian Automobile market owing to a growing middle class and a young population. Moreover, the growing interest of the companies in exploring the rural markets further aided the growth of the sector. The overall Passenger Vehicle (PV) segment has 13 per cent market share.

India is also a prominent auto exporter and has strong export growth expectations for the near future. In FY 2014-15, automobile exports grew by 15 per cent over the last year. In addition, several initiatives by the Government of India and the major automobile players in the Indian market are expected to make India a leader in the Two Wheeler (2W) and Four Wheeler (4W) market in the world by 2020.

FORD MOTOR COMPANYFord Motor Company, American automotive corporation founded in 1903 byHenry Fordand 11 associate investors. In 1919 the company was reincorporated, with Ford, his wife, Clara, and his son,Edsel, acquiring full ownership; they, their heirs, and the Ford Foundation (formed 1936) were sole stockholders until January 1956, when public sale of the common stock was first offered. The company manufactures passenger cars, trucks, and tractors as well as automotive parts and accessories. Headquarters are inDearborn,Michigan.

Henry Fordbuilt his first experimental car in a workshop behind his home inDetroitin 1896. After formation of the Ford Motor Company, the first Ford car was assembled at the Mack Avenue plant in July 1903. Five years later, in 1908, the highly successfulModel Twas introduced. Demand for this car was so great that Ford developed new mass-production methods in order to manufacture it in sufficient quantities; in 1911 he established the industrys first U.S. branch assembly plant (in Kansas City, Missouri) and opened the companys first overseas production plant in Manchester, England; in 1913 he introduced the worlds first movingassembly linefor cars; and in 1914, to further improve labour productivity, he introduced the $5 daily wage for an eight-hour day (replacing $2.34 for a nine-hour day).

The companys first international sales branch opened in Paris in 1908. By mid-1914 there were more than 500,000 Model Ts on the roads of the world; by 1923 the company was producing more than half of Americas automobiles; and, by the end of the 1920s, Ford had more than 20 overseas assembly plants in Europe, Latin America, Canada, Asia, South Africa, and Australia. The Ford had become the worlds most familiar make of car. JAGUAR COMAPNY

Jaguar's business was founded as theSwallow Sidecar Companyin 1922, originally making motorcyclesidecarsbefore developing bodies for passenger cars. Under the ownership of S. S. Cars Limited the business extended to complete cars. The name S. S. Cars was changed to "Jaguar" in 1945. A merger with the British Motor Corporation followed in 1966, the resulting enlarged company now being renamed asBritish Motor Holdings (BMH), which in 1968 merged with Leyland Motor Corporation and becameBritish Leyland, itself to be nationalized in 1975.

Jaguar was de-merged from British Leyland and was listed on theLondon Stock Exchangein 1984, becoming a constituent of the FTSE 100 Indexuntil it was acquired byFordin 1990. Jaguar has, in recent years, manufactured cars for theBritish Prime Minister, themost recent deliverybeing anXJin May 2010. The company also holdsroyal warrantsfrom QueenElizabeth IIand Prince Charles.

Jaguar cars today are designed in Jaguar Land Rover's engineering centres at theWhitley plantin Coventry and at theirGaydon sitein Warwickshire, and are

manufactured in Jaguar'sCastle Bromwich assembly plantinBirminghamwith some manufacturing expected to take place in the Solihull plant.

In September 2013 Jaguar Land Rover announced plans to open a 100 millionGBP(160 millionUSD) research and development centre in theUniversity of Warwick, Coventry to create a new generation of vehicle technologies. The carmaker said around 1,000 academics and engineers would work there and that construction would start in 2014.

TATA MOTOR

Tata Motors Limited, a USD 42 billion organisation, is a leading global automobile manufacturer with a portfolio that covers a wide range of cars, sports vehicles, buses, trucks and defence vehicles. Our marque can be found on and off-road in over 175 countries around the globe.

1945TATA MOTORS Established

60,000Employee Strength

$42 BillionCompany Turnover

>900,000Vehicles Sold

>6,600Sales & Service PointsTata Motors is part of the USD 100 billion Tata group founded by Jamsetji Tata in 1868. Sustainability and the spirit of giving back to society is a core philosophy and good corporate citizenship is strongly embedded in our DNA. Tata Motors is Indias largest automobile company. We bring to the customer a proven legacy of thought leadership with respect to customer-centricity and technology. We are driving the transformation of the Indian commercial vehicle landscape by offering customers leading edge auto technologies, packaged for power performances and lowest life-cycle costs. Our new passenger cars are designed for superior comfort, connectivity and performance. What keeps us at the forefront of the market is our focus on future-readiness and our pipeline of tech-enabled products. Our design and R&D centres located in India, the UK, Italy and Korea strive to innovate new products that achieve performances that will fire the imagination of GenNext customers. Across the globally dispersed organisation that we are today, there is one thing that energises and drives all our people and our activities and that is our mission to be passionate in anticipating and providing the best vehicles and experiences that excite our customers globally''.Q. Difference between Jaguar S- type and jaguar X 400?

STYPE: The S-Type was produced at Jaguar'sCastle Bromwichfacility inBirmingham, England. The car was styled byGeoff Lawsonin 1995 and is based on theJaguar DEW platform/Ford DEW platform, shared with theLincoln LS.[2]The first S-Types ("X200" 19992002) are distinguished by a U-shaped centre console and optional touch-screennavigation systemin the 2003 and later models. The traditional leaping jaguar hood ornament was optional even though it is approved by the US and EU standards and breaks away in the case of an accident. Subsequent models ("X202", "X204", "X206"; the last digit denoting the model year) have the Jaguar logo incorporated within the radiator grille and a more traditional 'looped' styling for the centre console. In Australia, the "leaper" bonnet ornament did not become available until 2004.X 400 TYPE: TheJaguar X-Type, codenamedX400, was launched in October 2001 as Jaguar's first compact executive car since the Jaguar Mark 2of 1955. The X-Type was one of the last to be styled under the supervision ofGeoff Lawson, with Wayne Burgess as principal designer.

The four-door saloon was launched in 2001 and in 2004 the five-door estate joined the range with production of both versions ending in 2009.The estate was officially marketed as the "Sportwagon in the United States and was the first Jaguar model designed byIan Callum.

Initially, the X-Type was only available with all-wheel-drive and either a 2.5 litre or 3.0 litre V6 petrol engine. In 2002, an entry-level 2.1 litre V6 front-wheel-drive model was added. All three engines were available with either five-speed automatic or five-speed manual transmissions. The X-Type grille was slightly modified for both the 2004 and 2006model years.

Jaguar X-Type estate (2008 facelift)

The X-Type facelift was unveiled at the 2007 Canary WharfMotorexpo.The revised X-Type went on sale internationally during 2008, with UK sales from March. The facelift featured revised front and rear fascias, new door mirrors with integrated turn indicator repeaters, the choice of a 2.2-litre diesel with particulate filter and a new six-speed automatic transmission with Jaguar Sequential Shift. The range continued to offer the 2.0-litre diesel, and two V6 petrol engines; 2.5 and 3.0-litre. In some European markets, the petrol engines were no longer marketed.

Q. Why did Ford sold Jaguar Land Rover to Tata motors?The purchase price is more than the market expected but still about half what Ford originally paid for the brands several years ago. The long-awaited deal, which was announced Wednesday, also carries a painful payout for Ford: after the sale closes, which is expected midyear Ford will give Tata another $600 million to make up for shortfalls in the two brands pension plans.

Tata Group, one of Indias largest conglomerates, has been on an overseas acquisition spree, buying everything from tea and coffee companies to steel manufacturers. Other Indian companies are also considering overseas acquisitions, as a weak dollar coupled with strong domestic growth make takeovers attractive, particularly in the United States.

When Tata does deals, it rarely changes the character of the company that it buys over the near term.

Ratan N. Tata, the chairman of Tata Sons and Tata Motors, reiterated that strategy on Wednesday, saying the Tata Group will endeavor to preserve and build on their heritage and competitiveness of the two brands, while keeping their identities intact. No changes are expected to employment terms for the nearly 16,000 workers at Jaguar and Land Rover.

Ford is in the midst of a painful overhaul, shedding costly units and workers in the United States. The company chief executive and president Alan R. Mulally said in astatementthat he was confident that Jaguar and Land Rover would thrive under their new owners. Fords were down 12 cents to $5.88 in late afternoon trading.

Now, it is time for Ford to concentrate on integrating the Ford brand globally, as we implement our plan to create a strong Ford Motor Company that delivers profitable growth for all, Mr. Mulally said. Ford has lost $15 billion in the past two years.

Ford will continue to provide some components, including power trains, to Jaguar and Land Rover, which are built in Britain, as well as some research and development support. Fords finance arm,Ford Motor Credit, will continue to provide financing to Jaguar and Land Rover dealers and customers for up to 12 months. The US auto major put the two marquees on the market in 2007 after posting losses of $12.6billion in 2006 - the heaviest in its 103-year history

Jaguar was not able to provide any profit for ford because of the high manufacturing costs provided in the United Kingdom.

The strong boy Land Rover's profit, on the other hand, was driven by the record sale of 2.26 lakh vehicles, an 18% YoY growth in 2007.

Ford was combining both the brands since the products and manufacturing of vehicles for Land Rover and Jaguar was so intertwined.

Deal Process 12/06/2007- Announcement from Ford that it plans to sell Land Rover and Jaguar.

August 2007 - Major bidders were identified

Tata Motors,

M&M,

Ceribrus capital Management,

TPG Capital,

Apollo Management

Indias Tata Motors and M&M arrived as top bidders ($ 2.05b & $ 1.9b)

03/01/2008Ford announces Tata as the preferred bidders

26/03/2008 - Ford agreed to sell their Jaguar Land Rover operations to Tata Motors.(2.3b)

02/06/2008The acquisition was completeCOMPETITIVE ADVANTAGE

Tata Motors was vulnerable to greater competition at home.

Foreign vehicle makers including Daimler, Nissan Motor, Volvo and MAN AG had struck local alliances for a bigger presence.

Tata Motors, which had a joint venture with Fiat for cars, engines and transmissions in India, was also facing heat from top car maker Maruti Suzuki India Ltd, Hyundai Motor, Renault and Volkswagen.

Q. Tatas acquisition & implementation of improved plans. What was the impact on revenue & profit?NEED FOR GROWTH

In the past few years, the Tata group had led the growing appetite among Indian companies to acquire businesses overseas in Europe, the United States, Australia and Africa - some even several times larger - in a bid to consolidate operations and emerge as the new agemultinationals.

Tata Motors was India's largest automobile company, with revenues of $7.2 billion in 2006-07.With over 4 million Tata vehicles plying in India, it was the leader in commercial vehicles and the second largest in passenger vehicles.

Tata Motors could comfortably finance the acquisition of Jaguar and Land Rover. The Indian automaker was sitting on a cash pile of over Rs 6,000 crore and generated free cash of over Rs 1,000 crore during FY07. It could easily use these reserves to raise more funds without endangering its finances.

At the end of last financial year, Tata Motors debt-to-equity ratio was a low 0.56, giving it ample head room to raise more funds. Low leverage of the auto biz provided funding flexibility

At the time financed the purchase through a $3bn, 15month bridge loan

Additional amount of US $ 0.7 billion was for engine and component supply, contingencies and working capital.

It intended to refinance the loan through long-term funds

valuable stakes in group companies

Owns $400m of Tata Steel at current prices

Owns stake in Tata Sons (Tata Groups holding company) worth at least $600m 3 modern plants in UK

2 advance design and engineering center

26 national sell companies

Intellectual property: free license to share technology with Ford

Support from ford motor credit: Ford motor credit will continue to support the sale of Jaguar and Land rover for next 12 months

Q. Is Jaguars success making Tata motors think of becoming a global brand?This summer, Jaguar Land Rover cranked up production to 24 hours at its plant near Liverpool, England, adding 1,000 jobs to help meet demand for its hot-selling and acclaimed Range Rover Evoque. Now, the company is readying the release of its much-anticipated Jaguar F-Type roadster.

Four years after being bought by an Indian company, the well-known but somewhat faded British brands are regaining some of their lost luster, racking up big sales from Shanghai to London.

The success has stunned analysts and investors, many of whom had said thatTata Motors, the Indian auto company, was making an expensive mistake when it acquired Jaguar Land Rover fromFord Motorfor $2.3 billion in June 2008. At the time,Fordwas raising money to ensure its own survival, and it sold the brands for several billion dollars less than it had paid to acquire them years earlier.

Analysts say Tata has done what few companies from emerging markets have been able to do turn around and successfully run a troubled Western company. Many others, including Tata Motors sister company Tata Steel, which paid $11.3 billion for Corus Steel in 2007, have struggled with acquisitions made in Europe and the United States in the era of cheap money before the financial crisis. Tata Motors appears to have succeeded in large part because it did not seek to run Jaguar Land Rover from Tata headquarters here. Instead, it has left day-to-day management in the hands of executives in England. It also benefited from projects started under Ford ownership, including the Evoque, which has won fans, including the exacting hosts of the BBC show Top Gear and the Chinese nouveau riche.

In its last fiscal year, which ended in March, Jaguar Land Rover posted a 27 percent jump in retail sales, to 306,000 vehicles, and became the primary driver of growth and profit for Tata Motors. The Indian car and truck business of Tata has stagnated in the same time because of a slowing domestic economy and a weak product lineup that includes about a dozen passenger cars. Sales of Tata cars were up an anemic 4 percent in the previous fiscal year.

Analysts said that barring a global economic recession, they expected Jaguar Land Rover to continue to do well because it was about to release several new models, including a redesigned version of its flagship Range Rover and the F-Type.

I think people were a bit skeptical and snobbish and maybe had some old colonial hangover, Tim Urquhart, a senior analyst at IHS Automotive in London, said about the initial doubts about the acquisition. But he added, If you look at Land Rover and Jaguar now, they probably have the strongest product line in their recent history if not ever.

Tatas takeover of Jaguar Land Rover did not always look promising. The financial crisis hit soon after the deal closed, and demand for luxury cars tumbled in Europe and North America its two biggest markets. Struggling with a $3 billion debt it took on to pay for the deal, Tata Motors was forced to put more money into the company after it failed to secure financial aid from Britain.

Many analysts questioned whether the company paid too much and extended itself too far, speculating that its chairman, Ratan Tata, a car buff and scion of the family that built the Tata group of companies, had become too enamored of buying global brands. Over the years, the group has acquired Tetley Tea, the Pierre Hotel in New York and Daewoo Commercial Vehicles in South Korea.

The acquisition has worked because the investment has been carefully targeted and effective, Phil Popham, global operations director for Jaguar Land Rover, said in a written response to questions. Our growth is supported by a disciplined financial plan involving tight cost controls and targeted investments.

Analysts and competitors credit the turnaround to Tatas financial reserves, which helped it weather tough times, and its wisdom in granting autonomy to managers in England.

What has helped is that Tata had staying power, said an executive at another auto company who asked not to be named because he did not want to speak publicly about a rival. And Tata adopted a hands-off policy.

The Ford effect extends beyond its past investments in the brands and the design and engineering for the Evoque. Most engines in Jaguar Land Rover cars still come from Ford, though the company is building its own engine factory in England.

Led by a former BMW executive, Ralf Speth, who took over as chief executive in early 2010, Jaguar Land Rover makes all of its cars, which range from $36,000 for an entry level S.U.V. to $140,000 for a convertible, in factories in England, though it is now starting assembly operations in other countries. The company reported this month that its latest quarterly profit was up 7.5 percent from a year ago to 235.9 million, or $372 million.

In North America, the companys sales were up 15 percent, to 58,003 cars, in the fiscal year that ended in March. J. D. Power recently rated Jaguar as the most improved car brand in its quality rankings.

Much of the success has come in China, a country that provided just 1 percent of Jaguar Land Rovers sales as recently as 2005 and is projected to generate sales in the double digits this year. The company made a big effort to expand dealerships in the country, where luxury car sales have been much stronger than in Western markets. Executives expect China to become the companys largest market soon, and last year they announced that Jaguar Land Rover would begin building and assembling cars there.

High-end car buyers in China appear to be drawn to Jaguars and Land Rovers in part because they are considered a novelty.

Liu Gang, a 33-year-old finance executive in Shanghai who confessed to not knowing much about cars, recently bought a Jaguar XF sports sedan, for which he paid 700,000 yuan, or $110,000. He considered and dismissed comparable models from BMW and Mercedes-Benz as pass. Let me be honest, its just a symbol of status, he said. Anybody in China can have a Mercedes-Benz.

But analysts say the Jaguar Land Rovers growing reliance on China suggests that a sharp slowdown there and another euro-related shock in Europe could derail its growth. Another concern is whether the company has enough models beside the Evoque to power future sales. The Evoque accounted for 85 percent of sales growth in the last fiscal year even though it was only on sale for the last seven months of the year. By contrast, sales of Jaguars have been relatively muted, increasing just 5 percent in the last fiscal year. More recently, Jaguar posted a 16.3 percent increase in global sales in the first seven months of this year compared with the same period last year.

Mr. Popham said the company expected sales of Jaguars to pick up with the introduction of the F-Type, a long-awaited sequel to its well-known E-Type roadster, which was introduced in 1961 and is considered by many car aficionados as one of the most beautiful sports cars ever made. A production version of the F-Type will make its debut at the Paris Motor Show on Sept. 27.

A lot is riding on the F-Type roadster, said Hormazd Sorabjee, editor ofAutoCar India, a Mumbai-based car magazine, adding that Jaguar has made big strides but still has a fair amount to do.

Still, analysts say that for Tata Motors, which recently hired a senior executive from General Motors to help revive its flagging Indian auto business, Jaguar Land Rover is likely to remain a driving force for the near future.BALANCE SHEET OF TATA MOTORS 2015

Recommendations

Consultants from Abstract Solutions worked closely with JLR staff to identify the key requirements for the systems and software modelling process to be supported in the IBM Rational Rhapsody tool. They performed reviews of existing models and provided recommendations for an in-house modelling code of practice. In addition to providing dedicated on-site modelling and tool use support, they also developed a model checking add-on to Rhapsody that validates models against the code of practice.The consultants:

Performedgapanalysis on the existing development process

Specifieda refinedsystems andsoftware development process

Refinedmodeldevelopment guidelines

Reviewed existing UML models and proposed best practices and recommendationsfor modeling

Developed bespoke Model Checker and extensions to IBM Rational Rhapsody

Supported the development ofdocument templates using IBM Rational Publishing Engine(RPE) for automated document generation

Supported use of Rational Rhapsody and its integration with other IBM Rational Systems for their ALM (Application LifeCycle Management) suite

Conclusion

Lean production is all about reducing waste. This involves working more effectively with TAKT time (the time available to produce each car). The teamwork approach is a recognition that the best way to achieve this is for all members of the workforce to be involved to achieve a quick response.Lean production has enabled Jaguar to cut out waste in the production of the Jaguar S-type at Castle Bromwich. Ford is now seeking to spread the message about lean production by incorporating a total of 400 of its Halewood employees into working at Castle Bromwich. The successful implementation of lean production at Jaguar will form the benchmark for the systems introduction at Halewood.BIBLIOGRAPHY

https://en.wikipedia.org/wiki/Tata_Motorshttps://en.wikipedia.org/wiki/Jaguar_X-Typehttps://en.wikipedia.org/wiki/Tata_Corus_acquisitionhttp://www.nytimes.com/2008/03/26/business/worldbusiness/26cnd-auto.htmlhttps://en.wikipedia.org/wiki/Jaguar_S-Typehttp://www.tatamotors.com/investors/financials/70-ar-html/bal-sheet.html

In $ million

particulars

TAMO

JLR

consolidated

net tangible assets

2510

2246

4756

net intangible assets

111

2010

2121

vehicles financing receivables

2935

-

2935

net current assets

-57

-107

536

cash

638

-

638

trade investments

233

-

233

pension asstes

-

696

696

other assets

3

297

300

total assets

6373

5142

12215

warranty liability and other provisions

489

2667

3156

pension liability

-

19

19

deferred tax liability

238

-

238

shareholders equity

2314

2456

2314

capital assets

-

-

156

minority interest

30

-

30

debt

3302

-

6302

total liability

6373

5142

12215

Balance sheet

TAMO

JLR

SPV

Cons..

sales

10210

14214

-

24424

cost synergies

-

-

-

-

EBITDA

1196

935

-

2131

EBITDA margin

11.70%

6.60%

-

8.70%

depreciation

218

699

-

917

interest

140

42

-

182

other income

105

-

-

105

PBT

944

194

-

1138

interest cost of acquisition

-

225

225

proforma PBT

944

194

-225

913

impact on PBT

-3%

-

-

-

In $ million

P&L A/c

AUTOMOBILE

2 WHEELER

3 WHEELER

PASSENGER VEHICLE

COMMERCIAL VEHICLE

MOTORCYCLE

SCOOTERS

SCOOTERETTES

MOPEDS

I.C.V.

M.C.V.

H.C.V.

5