tata morots' acquasiton of jaguar and land rover

8/14/2019 Tata Morots' Acquasiton of Jaguar and Land Rover

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TATA MOTORSTATA MOTORSACQUISITION OF JAGUARACQUISITION OF JAGUAR

AND LAND ROVERAND LAND ROVER

IBS KochiGroup-1Anurag GuptaChandan

JobinLiniRitesh


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IntroductionIntroduction

Jaguar and Land Rover(JLR) - Brandowned by US based Ford MotorsPremier Automotive Group.

Ford bought Jaguar from British LeylandLimited for US$2.5 bn in 1989.Ford bought the Land Rover from BMW for

US$2.7 bn in 2000. Tata Motors Acquired JLR on June 02, 2008

for US$2.3 bn.


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THE REASONS FORTHE REASONS FORTATA JAGUAR DEALTATA JAGUAR DEAL


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EXPERTS BELIEVE THAT:EXPERTS BELIEVE THAT:

researching on and developing a luxurycar without necessary technical know-how would have taken the companythree to five years, so this deal will help

the Tata to enter into luxury car marketeasily without much cost. At the price staring from 63 lakh and

going upto 93 lakh, it seems Tata has just got the right place to compete withthe current market leaders BMW,Audi, Mercedes


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It is going to give Tata Motors publicity onan international scale, and will placethe company among the worlds topautomobile companies

In 1999, Mr. Ratan Tata has said theywere interested in the Ford luxurybrands to reduce dependence on theIndian market and for a more globalpresence.

To overcome the competition fromMahindra & Mahindra who is an

international player in automotiveindustry


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DRAWBACKS:DRAWBACKS:q Firstly, they eat up the countrys precious

foreign reserve. Paying almost $3billion to Ford will lower the

governments reserve by quite a fewnotches.q Tata plans not to change the current

employee structure at Land Rover and

Jaguar, meaning the countrysemployment rate does not get anyassistance from this deal.


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TATA LAUCHED NEW MODELSTATA LAUCHED NEW MODELSIN:IN:

JAGUARv XF Sedanv Convertible

XKRv Sport XFR(Rs.63- Rs.92

Lakhs)

LAND ROVERv Discovery 3v Ranger Rover

Sportv Range Rover(Rs.63- Rs.89

Lakhs)


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WHY JAGUAR..WHY JAGUAR.. Long term strategic commitment to

automative sector. Opportunity to participate in fast growing

auto segments. Increased business diversity across marketsand products.

Jaguar provides a range of performance/luxury vehicle to broaden the brand

portfolio.


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Economical FactorsEconomical Factors

Indias huge geographic spreadIncreasing road developmentHigher GDP growth

Increasing per Capita IncomeCheaper and easier finance schemes


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Political and governmentPolitical and governmentfactors affecting the dealfactors affecting the deal As Tata motors is a part of large

conglomerate company its need to havea strong corporate governance .

Tata motors needs to pay close attention tothe political climate but also law andregulation in all countries were itsoperate .

Law governing commerce ,trade, growthand investment are dependent on localgovt. as well as how successful localmarkets and economies will be due toregional,national&local influence.


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ContinuedContinued The norms for the foreign investment and

import of technology have beenprogressively liberalized ,in order to makethis sector globally competitive.

100%foreign direct investment is

permissiable under automative route inthis sector.

The company is also subjected to extensivegovernment regulation regarding vehicleemission level,noise,safety,and levels of pollution.

The proposed tightening of vehicle emission

regulation will require significant cost forthe company.


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Strong political motivation for theglobalization.

Strong reputation and trust .Adaptive legislative framework.

The wave of liberalization has also given a

new dimension to globalization. The agreement has been an important step

in helping Tata motors to gain very quickaccess to a fairly large market and a largedistribution network.


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Strategies MadeStrategies Made

Presentation to union representativesassuring that no unit will be shutdown,no employee will be sacked and

additional employees will be appointedin 2-3 years.Impact of Corus steel deal and after deal

growth.

Executives were also welcomed andbrand name was also not changed.


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After Acquisition BenefitsAfter Acquisition Benefits

Strong R & D culture and facilities.Strong tie-ups with western technology

companies.Adaptive to new technologies

JLRs services and Distribution network in UK andother countries

Compete from both the ends- lower end-Nano(US$2500) and upper end Jaguar

XF(US$64000)Reduce companies dependence on Indianmarket(90%)

Component sourcing, engineering and designbenefits

Both JLR had many new models lined up for next


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ChallengesChallenges

Additional expenditure of US$1 bn.Global slow downEuropean Commissions rules like CO2

emission limit rangeParts and engine technologyEstablishment of Tata as premium car

brand in European countries.


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LeadersLeaders

"No institution can possibly survive if itneeds geniuses or supermen to

manage it. It must be organized in sucha way as to be able to get along undera leadership composed of averagehuman beings." Peter Drucker


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VisionVision

Tata Motors' transformation from anIndia-centric truck maker to aglobal auto company is a

remarkable story of visionaryleadership, determination andthinking big.


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Mr. Ravi KantMr. Ravi Kant

B.E from IIT, KharagpurMS from University of Aston, Birmingham, UK.Prior with Philips India Ltd as director Consumers

Electronics businessprior to which with LML Limited as senior

executive director (marketing) Titan Watches Limited as vice president (sales &

marketing).

Mr. Kant was also employed with KineticEngineering Limited and Hawkins CookersLimited.

Appointed as MD in 2005Now non executive vice-chairman of Tata Motor.


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"Effective leadership is not about makingspeeches or being liked; leadership isdefined by results not attributes"-

Peter Drucker


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Mr. Ratan Naval TataMr. Ratan Naval Tata

Ratan Tata completed a Bsc degreein engineering with structuralengineering from cornel university in1962.

Done Advanced management programform Harvard business school.

Joined Tata Group in 1962 after turning job with IBM on the advice of JRD Tata.

First sent to Tata steel in Jamshedpur towork on floor shop with blue collarworker.

1991 became rou chairman.


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Good business leaders create a vision,articulate the vision, passionately ownthe vision, and relentlessly drive it tocompletion.- Jack Welch


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FutureFuture

Indian Automobilemarket is expectedto grow at a CAGR of 9.5% amounting to13008 million by2010.

The liberalization policyfollowed bygovernment invitingforeign investor and

manufacturer.It is expected that by

2010 the Indian carmarket will be the3 rd largest car

market across globe.


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tata morots' acquasiton of jaguar and land rover

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