Tata Motors fancying Jaguar, Land Rover?

[Thad E Ginathom]

Preferred Bidder Status only?

And even I, who have been counselling that the deal isn't done until the deal is done, thought they'd reached that point late last year!

[bigman]

Originally Posted by Thad E Ginathom

Preferred Bidder Status only?

And even I, who have been counselling that the deal isn't done until the deal is done, thought they'd reached that point late last year!

The deal is in the bag now, give them a few weeks to iron things out and

[Thad E Ginathom]

Sorry...

OK, my knowledge of big business is limited, and correct me if needbe, but now will come, quite apart from more negotiations, stuff called Due Diligence, which is where they get to see stuff like accounts that would not have been made available up to know.

Nothing is in the bag until it's...

.... you know!

[Tstag]

Let's get one thing straight. Land Rover will not stick it's badge on a TATA Safari or anything like it. Land Rover will stay up market battling the likes of BMW. Jag will probably even drop the X type and push even further up market. TATA are not buying JLR to turn them into another Ford. They are buying JLR to enter the premium car sector and to access the "Rover" brand which they may well use to take on Ford. Land Rover is now reckoned to be making $1 billion dollars a year. That's impressive for a company that is investing $700 million dollars in Hybrid tech and making just 200,000 cars per annum.

Don't expect Land Rover to make traditional 4x4's either. They will make what sells for premium price tags and that will be more cars like the LRX concept and Range Rover Sport. The days of Land Rover just making cars like the Defender are over. These day's their number one rival is BMW or possibly Mercedes.

Jag is also on the UP. The XF appears to be a big hit and hopefully signals a reversal in fortunes for the brand. So for TATA fans the brand to watch is Rover. Expect the Indica V3 and future models to ship to the UK as Rovers and even be made here (as well as in India) to soak up capacity.....even Mahindra apparantly planned to make some Indian models in the UK. This isn't a lift and shift and its not about taking JLR down market, although some LR and Jag models may ALSO be made in India. It's about TATA entering the premium car sector and about TATA being reborn in Europe as Rover. It's also about TATA getting it's hands on JLR engineers. It's these guys that will make TATA motors a world power.

[redcandle]

Originally Posted by Tstag

So for TATA fans the brand to watch is Rover. Expect the Indica V3 and future models to ship to the UK

I agree with all you said, except the above statement.



My brief take on the issue:

Tata buying Jaguar-LandRover (JLR) is excellent news for Tata and Indians. But is it for JLR? It will be if Tata leaves them alone and gives them sufficient funding to compete in their markets; they need the funding as both brands have been losing customers until very recently.

The only link that Tata should keep between Tata Motors and JLR is using the technology for their existing and new cars. They should, in my opinion, in no circumstances sell cars from either brand through the other. If they keep the strategy where they mix up operations of the 2 companies with Tata motors, the world (most of it), would start to believe that the quality in JLR brands is deteriorating, that's psychology.

Cant pin on it where, but read that during a recent Jaguar dealers' meeting in Americas, their was extremely strong opposition of Tata's takeover. The western world is just not ready for an Indian company taking over their favourite brands. The title of the article was something along the lines of US dealers oppose TATA takeover. The only way they will prevent losing JLR customers, is by keeping them separate. Like, they did with Tetley tea in UK.

Me being Indian, am thrilled with the success of an Indian firm, but at the same time being a car-lover, cant see fall in quality of two great great brands.

Hope it all works out.




Redcandle

Oh forgot to mention that TATA has officially been named as the preferred buyer/bidder for Jaguar and Land Rover.


Redcandle

[Steeroid]

Originally Posted by Thad E Ginathom

OK, my knowledge of big business is limited, and correct me if needbe, but now will come, quite apart from more negotiations, stuff called Due Diligence, which is where they get to see stuff like accounts that would not have been made available up to know.

Due Diligence happens before the bids are put in - it is after due diligence that the buyers decide how much they think the business is worth.

[appuchan]

Originally Posted by Steeroid

Due Diligence happens before the bids are put in - it is after due diligence that the buyers decide how much they think the business is worth.

DD started sometime in mid-07, but only the strategic part is done. Ford is expected to open up all docs for Tata to complete the financial part.

Excerpts from the exclusive interview with Sanju Verma, Hormazd Sorbajee and Ashutosh Goel:

Q: How do you think this deal might be valued? What Tata Motors might have to take on by way of debt or losses and how it might impact the financial of Tata Motors as a stock?

Goel: The valuation of the deal is already been talked about at USD 2 billion; it could be plus or minus 5% from that depending on their final financial due diligence that Tata Motors will be undertaking now. As far as the impact on the financials of Tata Motors is concerned, it will be about 15-20% dilution for the equity of Tata Motors

[Steeroid]

Originally Posted by appuchan

Ford is expected to open up all docs for Tata to complete the financial part.

Perhaps, but I would think these 'focussed negotiations' are mostly to do with how much Tata are willing to pay in order to continue receiving Ford engines for the LRs and Volvo engines for the Jags, and related IPR misuse protection. This is the REAL negotiation - what Tata have paid for LR is exactly what the brands were valued at by many others. The engine supply will give Ford a continuous cash-flow.

[Automote]

To be honest I think this will be a fascinating development for all concerned. It will Tata two absolutely GLOBAL brands and access to a huge range of engines and technology.

Although it's not without potential problems for Tata. Jag/ Land Rover don't have any production facilities in North America ( one of the biggest markets ) and are affected by the weak dollar. But growth in India, China, Brazil, Russia could give new volume.

It will be interesting to see what happens with FIAT too. Could we have a new super-manufacturer? Tata/ Land Rover/ Jaguar - Fiat?? Would be great to think so.

Anyway please check out my blog on:

AUTOMOTE

See you there.
Mac

[bigman]

Originally Posted by Automote

To be honest I think this will be a fascinating development for all concerned. It will Tata two absolutely GLOBAL brands and access to a huge range of engines and technology.

Although it's not without potential problems for Tata. Jag/ Land Rover don't have any production facilities in North America ( one of the biggest markets ) and are affected by the weak dollar. But growth in India, China, Brazil, Russia could give new volume.

It will be interesting to see what happens with FIAT too. Could we have a new super-manufacturer? Tata/ Land Rover/ Jaguar - Fiat?? Would be great to think so.

Anyway please check out my blog on:

AUTOMOTE

See you there.
Mac

Who said they will get access to the engines ? When BMW sold LR to Ford they kept the rights for the engine (it was a BMW engine) used in a few models. Ford then had to buy in engines from BMW till they sorted out an engine themselves.

The Indica will never sell in the UK. How many bought it when it was reincarnated as the Rover City ? Very bad sales and even worse reviews.

[Thad E Ginathom]

The Indica will certainly not sell in UK.

Even Swift is not popular (depsite its awards a year or three ago), and Suzuki, generally, was a brand for those who wanted to buy new but couldn't afford it any other way.

UK has had it with cars that rattle in six months and fall apart a couple of years later: that's what British cars were like, and that is how the Japanese wiped the floor with them long ago.

Rover... I think that 'Rover' and 'Landrover' brands parted company long since, didn't they? Doesn't Rover belong to some company in China? Surely Ford owned Landrover while "Rover" was still struggling to remain the last non-specialist "British" car company?

[iraghava]

Originally Posted by Thad E Ginathom

Rover... I think that 'Rover' and 'Landrover' brands parted company long since, didn't they? Doesn't Rover belong to some company in China? Surely Ford owned Landrover while "Rover" was still struggling to remain the last non-specialist "British" car company?

Yup Thad, BMW sold Land Rover to Ford for a healthy sum & it got joined into Ford's PAG divison (LR, Jag, AM, Volvo) while after unsuccessfully trying to run Rover/MG, they sold it to the Phoenix Consortium for a tenner & Rover even got money from the British Govt. to keep them afloat.

Alas, that did not help as after a few years of generally monkeying about the consortium heads walked away with most of the money & after declaring bankruptcy sold the brand/plant to two separate Chinese companies.

[Thad E Ginathom]

one point that we don't seem to have touched on much is...

There's hardly a bidding war going on here!

Prestigious brands these may be, but it's not as if half the words auto businesses are trying to buy them in.

That alone makes me wonder, again, how worthwhile they are.

Rover, by the way, seemed to be making some rather nice cars when it all finally went down the pan :(

[Tstag]

Originally Posted by bigman

The Indica will never sell in the UK. How many bought it when it was reincarnated as the Rover City ? Very bad sales and even worse reviews.

Agreed. But the Indica v3, with upgraded interior and with a bargain basement price may sell in respectfull numbers. The bigger models will be more important... One thing is a cert, Rover is TATA's best option when taking their cars to Europe. In the English language TATA is too close to the word tatty (which means rubbish). It's also a well known brand so it will get them in the headlines and generate PR. Trying to set up a new brand from scratch in an established market would be higher risk IMHO.

Originally Posted by iraghava

Yup Thad, BMW sold Land Rover to Ford for a healthy sum & it got joined into Ford's PAG divison (LR, Jag, AM, Volvo) while after unsuccessfully trying to run Rover/MG, they sold it to the Phoenix Consortium for a tenner & Rover even got money from the British Govt. to keep them afloat.

Rover didn't get any subsidy from the Government. BMW gave them a dowry of 500 million to take it off their hands, but in the car industry this is small change, but it kept them going for 5 years and they developed 3 new MG's variants and a "supercar", they ran out of money to redevelop the Indica though.....

[ajmat]

Originally Posted by Tstag

Rover didn't get any subsidy from the Government. BMW gave them a dowry of 500 million to take it off their hands, but in the car industry this is small change, but it kept them going for 5 years and they developed 3 new MG's variants and a "supercar", they ran out of money to redevelop the Indica though.....

What really happened is the the 4 promoters promised to preserve all jobs and keep things like before. What really happened is that they asset stripped the company and never channeled money into proper development. They made big moolah and let the community down. The govt stepped into let these people take over. The other contender was a VC who would have preserved but scaled thins down.

What is ironic is that, after this, BMW created much more jobs and revenue with investment in the Mini and the engine plant.

The Rover brand name is owned by Ford. BMW retained the rights and sold it to Ford after the collapse. Ford insisted on last right of refusal to preserve the Land Rover brand in entirety. This will be one of those 40 negotiation points