Tata’s Sports Car Project Goes Belly-Up
Talk about a disappointing turn of events, especially after the excitement surrounding a possible Tata sports car hit its stride at the 2017 Geneva Motor Show with the introduction of the Tamo Racemo. Now it looks like we’re unlikely to see the Tamo Racemo, or any other Tata sports car for that matter, in the near future. A report from Autocar India has doused the excitement surrounding the Tamo Racemo as it appears that Tata is putting the project on ice as part of its plans to “reduce investments in non-core business ideas.”
Though the details behind the about-face turn have yet to be confirmed, the publication did cite sources within the company who believe that the sports car project is, at the very least, hanging by a thread. The costs of building the sports car seem to be the biggest culprit behind this sudden about-face. At the very least, it was a casualty of a bigger goal the company is now moving on to, which includes streamlining its business models in an effort to improve production volume and regain market shares. None of these new directives have the Tamo Racemo in it, which is a shame considering that it’s debut earlier this year in Geneva was met with so much promise. None of that excitement matters now, though, because at the end of the day, the proverbial “bottom line” has once again dictated its terms on another automaker. Hopefully, Tata can sort out all of the current issues it has and revisit the Tamo Racemo in the future. Just don’t count on it happening anytime soon.
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The news about Jaguar Land Rover’s parent company, the India-based Tata, using some of JLR’s platforms for its own models isn’t really news. That information has been floating around since last summer. However, it appears Tata has now tapped the new Land Rover Discovery Sport’s LR-MS underpinnings to be the first platform it will use in constructing a new segment of “world-class” vehicles.
It’s been about three years since Tata bought Jaguar and Land Roverfrom one of America’s big top three - Ford - and now the company is thinking of taking the last few necessary steps to completely cut ties with the former owner. A new Tata annual report has been released stating that the company is considering a joint engine-development program with its Jaguar Land Rover unit. If pushed through, the new engine could cement the two brands’ independence from Ford.
"To optimize the synergistic strengths between JLR and Tata Motors in India, an examination is also under way on a joint engine development program which would have manufacturing facilities both in the U.K. and India," Ratan Tata said in a recent interview.
These new engines will be a big step for the Indian company, who are beginning to pick up speed with models like the Range Rover Evoque and the new Jaguar XK and XF. Our concern will be for future models which will need adequate engines to obtain proper performance numbers matching that of the Ford-built engines. Whether or not Tata has the ability to pull something like this off is still up in the air.
Tata Motors Ltd., the owner of Jaguar Land Rover, came away with a nice chunk of change in the first quarter of the automotive fiscal year. Not to mention a healthy climb for its stock.
The company posted a $430 million profit, which helped the stock climb 5.6 percent to a 19-year high, according to Bloomberg. That is nearly twice the amount of profit that analysts – and we use that term loosely – predicted. Sales for the company increased by 64 percent to $5.8 billion.
Jaguar Land Rover played a big role in all this, posting a $370 million profit during the first quarter. Sales increased from 35,947 to 57,153. That sales jump can easily be attributed to their fantastic new cars, including the XF and the XJ.
Tata was even successful with their own car and truck division, as it saw a 48 percent increase to a total of 181,708 vehicles sold, which included 14,779 Nano cars. That growth can be attributed to the strength of India’s economy.
For $2,000 a pop, the Tata Nano city car is about as affordable as any production car you can find on the planet. And given its relatively cheap price tag, nobody will ever mistake the Nano for one of the fastest and sturdiest cars out there.
These days, the Nano has been on-fire in the news lately, and we mean that literally. After three separate incidents were reported last year of a Nano going up in flames, we now bring you episode number four.
According to an Indian news report, this Nano inexplicably burst into flames for no apparent reason. The owner of the car, insurance agent Satish Sawant and his chauffeur – don’t ask us why a Nano needs a chauffer – escaped the incident without any injuries, although they were as dumbfounded as the rest of us as to how the Nano – a car that was only recently purchased – caught fire just like that.
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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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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 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.
The October production of the Tata Nano, a $2,300 mini-car, may be slowed or halted due to violent protests at the new Singur, West Bengal plant. Eruption of protests began after Tata build a $350 million plant on the site of fertile farmland. The West Bengal state government provided Tata Motors with 1,000 acres for the factory, which they brought from local farmers. Some farmers refused to sell and are demanding the return of their land.
The increasing amount of violence is concerning Tata, so much so that the Indian automaker is considering completely abandoning the site. “What has concerned us is the violence, the disruptions, that has led us to be concerned about the safety of our employees, our equipment and investment, and of the viability of the process,” said Chairman Ratan Tata “If anybody is under the impression that because we have made this very large investment of 1,500 crore rupees ($350 million), that we would not move, then they are wrong, because we would move, whatever the cost, to protect our people. I can’t bring our managers and the families to West Bengal, if they’re going to be beaten, if there is going to be violence constantly, if their children are going to be afraid to go to school.”