What would be your immediate reaction if one day you would get the news that Vivo phones acquired Samsung mobiles! Something that is difficult to digest right. Well, this was exactly what happened when the news of Tata acquisition over JLR (Jaguar-Land Rover) hit the Indian shores for the first time.
This acquisition wasn’t just a normal takeover that we hear in the Business world. In fact, it was 9-year-old sweet revenge from Tata group to Ford group for the humiliation they did to Tata in 1999. The story unfolds when the Tata group went to sell the groups passenger car division to Ford as the Indian market response was way too saddening for the desi brand due to the global financial crisis then.
However, some harsh statements addressing that the Indian brand was incapable to sustain in the automobile industry wasn’t well taken by Mr. Ratan Tata who called the deal off and returned back. And then Karma played a villain role for Ford group and within 9 years the company was on the verge of bankruptcy which forced the Ford group to put over their premium brands (JLR) for sale. This was a golden opportunity for the Tata group as it was during this period they started trying to enter the premium market. Tata group took over the iconic JLR from Ford group for 2.3 billion US $ which was just half of what Ford paid for acquiring both the brands long time back.
‘The problem with JLR was that its retro designs were getting too outdated and their engines were not considered to be efficient enough. How much ever they tried they weren’t able to compete with the existing competitors like BMW, Mercedez Benz, Audi, etc which in turn forced them to sell off the brand. Thus Tata focussed on 3 main consumer requirements known as the 3-point category as indicated by Forbes magazine
Design Change- Shifted from luxury sedans to the luxury SUV segment.
Cost-cutting – Jaguar XJ (98 lakhs)
Benz S class 350d (1.58 Cr)
BMW 7 series (1.31 Cr)
Fuel-efficient engines – Major consumer requirement as fuel prices were skyrocketing that time
Tata group were warned that all these new implementations would require them minimum 4-5 years but Tata aimed them for a mere 12-24 month’s strategy which finally proved well for the company. As of now, JLR is the major revenue generator in Tata’s automobile vertical. Ironically that’s how an Indian company did a favor to the so-called US giants.
OFFICIAL MEDIA PARTNER: NEWSWIRE
OFFICIAL PROMOTIONAL PARTNER: IBS MESSENGER
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