Tata Motors in Global Top Leaugue

For last few months, the auto industry was waiting with suspense. Today finally Tata Motors have made the deal. It acquired prestigious Jaguar, Land Rover of UK from Ford Motors for $2.3 billion- less than half what Ford paid for the two brands-Jaguar in 1989 and Land Rover in 2000. And with this acquisition, Tata Motors now owns the iconic brands in automotive industry and goes in the top leaugue. What a great achievement for a company of India! The company that would have never thought of going beyond technical collaborations has acquired one of UK’s most prestigious brands in manufacturing sector. As Business Week asks, “Could Winston Churchill, or even the current Queen of England, have imagined a half-century ago that a pair of Britain’s proudest industrial icons would one day be owned by an Indian company?” Tata Motors create thus a history. Many claim it a day of pride for India. Let Indian Automotive Industry Celebrate. Perhaps the biggest business news of the day in the global media is this Tata Motors take over.

Ratan Tata has prudently promised to maintain the iconic brands. As reported, Tata said as early as at the Geneva Auto Show last month, “Our plan is to retain the image, the touch, and the feel of Jaguar and Land Rover. We will not tinker with the brands in any way…” Tata Motors has also assured that it “will not transfer Jaguar and Land Rover production or component sourcing from Britain to low-cost countries, as had been feared by British unions.” Ford has combined parts and even power trains of Jaguars and Land Rovers. And it has agreed to continue supplying key parts and components even after the takeover by Tata. And it means that Tata Motors willn’t be benefited by the lowcost Indian sources in near future.

However, there are many questions in industry. If Ford couldn’t afford ‘these expensive hobbies’, will it be possible to service them for Tata Motors? Can Tata Rev Up Jaguar? However, Tata motors can certainly learn and apply the acquisitioned technology to improve its own models in India, helping it steal a march on rivals both at home and internationally, as claimed by many analysts.

As it is has been happening in past let Tata Motors proves the predictors and distracters wrong again with Jaguar Land Rover deal as it did with Indica (silencing critics who thought the bus and truck maker wouldn’t pull it off) and Nano (when Ratan Tata’s business acumen was again questioned when he announced plans five years ago to build the world’s cheapest car).

Let Tata Motors try to concentrate on building now a name for the robust quality of its products. It has all the experts from all over the world to help. With deal over, the managerial talents of Tata Motors will be on test in years to come to maintain the growth towards the top. Assuming India and Indians are good enough in the areas of management, it is now in the R&D and design where India must excel.

Can Tata Motors be India’s Toyota through organic along with inorganic growth?

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