Talk about a bittersweet ceremony.
Tata Motors finally launched its two newest brands, Jaguar and Land Rover, in India despite growing concerns of plunging sales and looming threats of job insecurity and factory closures dampening what should have been a momentous occasion for the Indian automaker.
Tata acquired the two luxury brands from Ford in March 2008 to the tune of $2.3 billion and while it was a monumental acquisition at the time, the continued struggles of Jaguar and Land Rover has sapped some of Tata’s good fortune. Ever since Tata acquired the two brands, the company has lost over $504 million, marking the first time since 2001 that Tata has reported an annual loss on their bottom line.
We don’t blame Tata for this acquisition. After all, adding two luxury brands to your company roster is a deal that you’d be ill-advised to pass up. Unfortunately, they just did it at the wrong time – soon after they made the purchase, the global economy collapsed. Talk about bad timing.
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In any event, Tata remains optimistic that both Jaguar and Land Rover can rebound from a collapse that saw their sales plummet from 246,000 vehicles last year to 167,000 this year at the same period.
“We at Tata Motors are proud to have these brands,” said Ratan Tata, Chairman of Tata Motors. “Regardless of how the economy has played out, we still maintain that it was a terrific decision,” he added.
The question now is how Tata can market their two new brands to a world that knows very little about them, outside of producing the world’s cheapest car. You ask someone out on the streets and chances are, they won’t know that an Indian-based company famous for its budget vehicles also owns two of the world’s most luxurious brands, famous for its roster of prestigious vehicles.
Nevertheless, Tata remains undaunted. The company is still moving forward with the release of their new models, including the Jaguar XF and XFR sedans, the XKR coupe, the Land Rover Discovery 3, and the Range Rover S.U.V.
Tata also announced that they are in talks with the Indian government over the possibility of supplying the armed forces with their new vehicles.
It remains to be seen how Tata’s purchase of Jaguar and Land Rover will determine the future for all three brands. For now, Tata is content with experiencing growing pains, with an eye towards a steady rebound down the road.