Much like its Italian counterpart Fiat, Tata seems to be going against the trend these days by purchasing as many car brands as it can possibly acquire. After having bought Jaguar and Land Rover, the Indian-based manufacturer is already lining up a package to purchase Pininfarina.
The Italian coachbuilder’s parent company, Pincar, recently put its 50.7% stake in the company out on the market and has even hired a bank to field prospective buyers. It seems like an odd pairing but that’s also what everybody said when word spread about Tata’s intent to purchase two luxury British brands in Jaguar and Land Rover – and we all know how that turned out.
Besides, it’s not like Tata and Pininfarina have no history together. If you might recall, the coachbuilders from the land of pizza were the ones who designed the Prima, Tata’s concept car, which appeared at the Geneva Motor Show a few months ago. If Tata does end up purchasing Pininfarina, it only shows that the Indian car makers are poised to become – if they’re not already – serious players in the auto industry for many years to come.
It wasn’t that long ago when Tata Motors raised a lot of eyebrows when it purchased Jaguar and Land Rover, two struggling brands that were in bad need of resuscitation. For a while, it seemed like the purchase was going to backfire on the folks from India. It certainly didn’t help when the two British brands reported losses in excess of $1 billion last year while Tata also dealing with losses of over half a billion by themselves.
But now, thanks in part to the strong showing of the Jaguar XF and XJ series and recent news that Land Rover is set to increase production due to forecasts of strong demand for its Discover and Range Rover Sport SUVs, it’s looking like Tata is beginning to show everyone precisely why they bought these two brands in the first place.
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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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Tata Motors Ltd.’s purchase of Jaguar and Land Rover caught the auto industry by surprise. As far as the water cooler talk surrounding the purchase was considered, a familiar question was repeatedly asked: How can a truck-maker from India end up buying two of the most luxurious brands in the world today?
Now, it seems that the purchase has come back and turned the tables on the Indian truck giant.
For the first time in seven years, Tata has posted a consolidated net loss of over 25 billion rupees ($520 million) from the period of April 2008 up to March 2009. This, of course, is a stark contrast from Tata’s performance a year ago when it made a net income of 22 billion rupees.
The culprits for this unfortunate about-face in company fortunes lies in the plummeting sales of the industry’s luxury car segment as to which both Jaguar and Land Rover are staples. For one, Land Rover sales fell to 120,000 after selling a little under 200,000 units the year before. Similarly, the sale of Jaguar vehicles met a similar fate, falling to 47,000 units from 50,000 the previous year.
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Given that we’re all living through one of the worst economic times since The Great Depression, it seems that money pinching and budget tightening has become the new fad these days.
So when the topic of purchasing a cheap car surfaces, there aren’t a lot of manufacturers that can offer more for less than the Tata Nano.
With a price tag that comes up to only $2,200 in India, including taxes and fees, the Tata Nano – not to be mistaken for the Macintosh MP3 player - is becoming the latest must-have car of the cash-strapped man.
While it doesn’t look the least bit imposing, the Nano is still less than a quarter of the next set of cheap cars you can find anywhere.
After all, when you strip down the essentials of a car, the most obvious need is for you to be able to get to Point B from Point A, which after all is what we’re all looking for, right?
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The Tata Nano is definitely not the kind of car that catches a lot of buzz. However the Pr1ma Concept, revealed at the Geneva Motor Show, is. With this concept Tata Motors has taken a huge step forward. The vehicle was designed by Pininfarina, and offers an indication of how the next generation of Tata saloons might be interpreted. The focus is on the distinctive, elegant design.
Conceived to provide a luxurious level of comfort, this 4-door has a straight-forward but very refined design. All this combined with twisting lines give the car the personality of a coupe. It is a solution that immediately adds value, compared to the basic essential design usually associated with the Tata brand.
The Tata Pr1ma addresses a higher segment of drivers; the external and internal measurements are larger than those of the Indigo, thanks in part to a longer wheelbase. The design balances fluidity and tension, and the result is an elegant look, that manages to be both classic and modern. This type of creation is what the Indian automaker needs to elevate themselves to the next level of automotive manufacturing. You may even see them popping up here in the U.S.
Press release after the jump.
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Fiat was making poor quality cheap cars. Their cars were boring slow and the saying "fix it again Tony" reigned true. They were a company on the brink of bankruptcy.
Sergio Marchionne took over as CEO for Fiat in June of 2004. The Marchionne era of Fiats have been of better quality and better style. Under Marchionne Fiat has introduced the Bravo, Grande Punto, 500 and many more great cars. Under Marchionne Fiat has formed a joint venture with India’s TATA motors and China’s Chery motors. Marchionne also brought Fiat back to Mexico and Australia.
Fiat has partnered up with BMW to help relaunch the Alfa Romeo brand into North America. It is believed that new Alfa Romeo 149, which will replace the 147, will be built on a BMW platform and possibly even have a BMW power plant. This is great news for people who would like BMW handling with the beautiful line of an Alfa Romeo.
On January 20, 2009 Fiat and Chrysler announced the formation of a global alliance, in which Fiat will take a 35% stake in Chrysler with the opportunity of having as much as a 55% stake in the future.
So whats next for Fiat? They have been on a steady up rise since 2004 and they are showing no signs of stopping.
Will Fiat eventually come close to Toyota figures in the future? That will all depend on how North American sales will be, Once Fiat does come back to North America it doesn’t look like they will ever be leaving. Finally a new Italian car that will not send you back six figures.
Tata was not messing around when it said that the protests at the Nano plant may make it go elsewhere. Yesterday Tata announced that is was stopping construction on the plant in Singur, a farming community in West Bengal state in India. The company said in a statement, “This decision was taken in order to ensure the safety of its employees and contract labor, who have continued to be violently obstructed from reporting to work.” The center of the problem is the 400 acres of farmland that was taken for the factory grounds, and the farmers that want it back. This represents a large setback to the world’s cheapest car considering the plant construction was near completion and employed about 4,000 people so far.
Now the Nano is now shopping for a new home. There is no word on how this setback will effect production schedules or possibly the price of the $2,500 car.
Tata Nano was supposed to be the cheapest car in the world. People should have been thrilled about it, but not everyone is so cheery.
Tata was supposed to build the Nano at the plant in the Singur area of India. That was before it has been blockaded by farmers who have decided not to cede 162 hectares of terrain destined for factory expansion. The West Bengal government hasn’t reached an agreement with the workers, and it decided not to use force to prevent the protests. Given the situation, production has been stopped. Tata has threatened the local government with moving production to other areas if a solution cannot be reached in the near future.
Tata is getting the attention of the world with its micro car called the Nano. The Indian company has also gained a worldwide distribution network with its acquisition of Jaguar and Land Rover. Its distribution is further enhanced if it sells Nanos through Fiat. With all of this, it looks like Tata may be setting the stage to become a world brand.
If this is true, what else does it have to offer? Tata may have given a glimpse at what is available with the launch of the Indica Vista at home this week. For a little more than the price of two Nanos (under $6,000 at current exchange rates,) Tata customers can get a car that’s over two feet longer and eight inches wider than the Nano.
Powering the Indica Vista will be either a 75 hp diesel or 65 hp gas engine. While this kind of small power isn’t something that lends itself to the U.S. market, this may be in line for Europe. If the Indica could meet Euro NCAP safety regulations, this would be a car that may have potential. For example Proton, a Malaysian company that also owns Lotus, sells a small car called the Savvy in Europe. While this is considered a bargain basement car, it is similar in specifications to the Indica but costs about 1000 pounds more.
Is all this speculation? Mostly. But what can’t be ignored is the desire for companies to grow, and this may be the next Tata to be given to the world.
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