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By the time you read this, there’s little doubt that Tata will have been announced as the new owner of two legendary, and quintessentially British, marques – Jaguar and Land Rover. At the moment, an official announcement is still awaited, but it appears to be a foregone conclusion. Nevertheless, as they say, ‘it’s not over until the fat lady sings’ – in this case the fat lady is the ailing Ford Motor Company, which is expected to announce the buyout in early 2008.

It’s a matter of great pride for our country that two Indian companies made it to the final round of bidding – Tata Motors and Mahindra & Mahindra. M&M recently pulled out of the race citing some last minute complications.

Tata’s buyout of Jaguar and Land Rover, at an expected US $2 billion, may pale in comparison to its recent acquisition of the steel giant Corus at US $ 12 billion, but in some ways it announces to the world even more firmly that India’s time has well and truly arrived. Reason being, Jaguar and Land Rover are much more in the public eye – in fact, in the hearts and minds of people across the globe – as opposed to a faceless organization, albeit a massive one.

Both these marques have a very rich heritage and tradition. Tata will be well aware that leveraging this heritage, and maintaining the inherent characteristics of both marques, will be critical to their success moving forward.
Tata will be well aware that leveraging this beritage, and maintaining the inherent characteristics of Jaguar and Land Rover, will be critical to their success moving forward
Tata’s also fortunate to have stepped in at a very opportune time indeed, especially in the case of Jaguar. While Land Rover, as an individual entity, makes a healthy profit and is a brand held in high regard the world over, Jaguar hasn’t been so fortunate in the recent past. The company has been fighting a losing battle to wipe out its red ink, and Ford has pumped in an enormous amount of time and money to ensure its existence and revival.

It appears that Jaguar could well be on the cusp of that revival as we speak. The money that Ford has pumped into product development means that Jaguar has an exciting new model line up in the pipeline – its new XF sedan, which hints at a completely fresh approach, is evidence of this. Even before its launch, the company’s received over 3,000 bookings in the UK itself. This model has the potential to single handedly turn the marque around and lead its revival.

Needless to say, there will be huge challenges as well. In many cases, Tata Motors will have to depend on Ford’s help and active involvement in areas such as drivetrain technology, R&D for better fuel efficiency, lower emissions, etc. At the same time, for Tata Motors this means immediate access to new and cutting edge technology and international markets. They can use both these factors to further leverage their relationship with Fiat – who could benefit from the existing dealer network for the re-entry of Alfa Romeo in the US, or even some of Land Rover’s expertise to assist in developing an SUV of its own. Moreover, ownership of these marques will give the Tata brand itself greater appeal. Even if it takes them many years to incorporate new technologies into their own cars, the halo effect will begin almost instantaneously.

At the complete other end of the spectrum, Tata Motors will preview the highly anticipated One-Lakh car at the Auto Expo in New Delhi for the first time. The Expo, which has doubled in size since the last edition in 2006, is indicative of how rapidly the Indian market is evolving. Be certain to attend the show, and don’t forget to pay us a visit outside Hall 7 in Pragati Maidan.

The car in this image is a Ferrari FXX – at the time referred to as the Super Enzo – caught testing at Fiorano during a very memorable trip to Maranello, the home of Ferrari, in 2005. See our feature story for more, as well several other exciting destinations.

Bmw Takes Two on Merger

DaimlerChrysler, parent automaker of Mercedes-Benz, has already signed the papers to their corporate divorce while their strong rival BMW is planning to launch a takeover bid for Volvo earlier this year as revealed by Autocar. It can be noted that most analysts have expressed their concern over mergers in the auto industry saying that it is not pragmatic. But it looks like BMW just don’t want itself to be daunted by the number of failed mergers in the industry and preferred to personally experience it.

Anyway, the Bavarian automaker and producer of high quality BMW exhaust have already requested a complete breakdown of Volvo’s financial position from a European investment bank which is handling enquiries on behalf of Ford, the owner of Volvo. Reliable sources have also revealed that BMW has earlier eyed the Alfa Romeo as its takeover target.

According to industry experts BMW is planning to expand its range of brands to support the future growth of the company. Likewise, part of its plan is underpinning the front-wheel-drive Mini division by expanding its output and it can do so with the help of Volvo.

Why Volvo? Company bosses at BMW saw Volvo as the fitting global brand complimentary to BMW, which they deemed has considerable room for growth and room to accommodate Volvo. Although BMW will always emphasize driving pleasure, Volvo on the other hand will contribute safety and environmental concerns to the mix.

At present it not yet clear what BMW plans are but its probable that the larger saloon and estate models of Volvo just in case would be switched to BMW platforms offering both rear-and four-wheel drive. The smaller cars in the Volvo’s range would remained front-drive and would probably be merged to the Mini family expanding this model range.

The Mini brand is currently one of the biggest problems of BMW and it has already been forced to allot additional investment just for the redesigning of the new Mini as well as engineering the Mini Clubman estate. But despite all the efforts Mini sales are still down on their 2005 peak and the BMW insiders admit that a total annual output of 250,000 to 270,000 cars is just not enough to secure a profitable long-term future for the Mini brand.

Potentially with Volvo, BMW could build the proposed large five-door Mini and Mini SUV on the same front-drive chassis as the future S40 and V50. And let’s just say for the sake of argument that this was done, an annual output of 500,000 upmarket Volvo and Mini front-drive cars could ensure long-term profitability.

The expectation for future profit is not new when it comes to merger in fact every one of those failed union in the auto industry is hoping for the same thing that’s why they merge in the first place. Unfortunately, none of those merges survive except for the seven years partnership between Nissan and Renault but even their union is still uncertain and nobody knows what may happen in the future.

And let us not forget that seven years ago BMW was humiliated when it incurred massive losses which forced it to split up and sell the Rover Group which it bought in 1994. The question now is: Has BMW forgets the lessons of the past or has it learned a lot to create a new successful partnership? Well only BMW can answer that.