SUVs Say Tata to Ford
After the well publicised sale of Jaguar and Land Rover to Tata, how is this likely to affect the Indian car manufacturer?
If we have a look at the Tata Motors [TCOA] share price on the London Stock Exchange we can see there has been a drop of just over 11 percent in the month of May. Ford sold of Land Rover and Jaguar for about half the price they paid, so was this a good move for Tata?
“Jaguar and Land Rover are two iconic brands with worldwide growth prospects. These brands will retain their distinctive identities,” Ratan Tata, chairman of Tata Motors said in a statement after the acquisition.
Jaguar
The new Jaguar XF has been well received by many consumers, even winning a design award for its bold design – a significant step-away from the traditional Jaguar image. In the hotly competitive car manufacturing market this can only mean good news for Tata. After an outlay of $2.3bn to purchase Jaguar and Land Rover, Tata will be keen to recoup their initial outlay as quickly as possible.
Enthusiasts of the Jaguar XF give some impartial information on the new model at a xfforum.com. The XF sits within the luxury mid-size executive model range of cars, that includes the BMW 5-series and the Mercedes Benz E-class.
Land Rover
The acquisition of Land Rover is an interesting move for Tata. With rising fuel costs, large SUV vehicles are increasingly a status symbol rather than purely an off-road vehicle. Although there are strong views for-and -against 4×4 vehicles, there is no doubt that many people find a four-wheel drive invaluable for their day-to-day business – whether that involves towing large trailers or off-road agricultural use.
The smaller Land Rover Freelander model is perhaps aimed more at the family market, with it’s smaller overall dimensions and better fuel economy. In the past many 4×4 vehicles have received poor safety ratings, but this doesn’t seem to be the case with the Freelander, receiving a five star EURONCAP rating.
Again, as with Jaguar, a lot of enthusiast forums and blogs have popped up around the Land Rover brand including Landyzone. Such sites are a good place to get information on the brand/vehicles available.
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Comments
Land Rover was the part of the deal that was turning a profit. Jaguar has been losing Ford money for quite some time. Land Rover’s continued development in technology, such as the new ‘All Terrain Response System’ earned them one of the two coveted Queens Awards they picked up this year. This can do nothing but boost the brand and help ensure a successful financial future.
@ Freed Lander – I was quite surprised by the EURONCAP rating for the Freelander to be honest. I thought 4×4 vehicles tended to be unsafe, but that’s clearly not the case anymore.
@ Orlandy – I didn’t realise Land Rover were making a profit, I knew Jaguar were in pretty sore-straights, but I think the new XF may buck the trend. They certainly look the business, I’m not too sure how economical they are though.
Time will tell whether it was a good buy for Tata. At $2.3bn it was quite a large investment for the Indian car manufacturer.
Who would have thought that the legendary groove beat-combo Manhattan Transfer would have foreseen the performance income potential when they wrote Chansons D’Amour ….each time I hear….ra tata tata tata”
The Freelander certainly has come a long way forward with improved safety features – back in 2002 the ANCAP test only awarded 3 stars and a meagre 6.434 out of 16 for the offset crash test (possibly the most common crash off roaders experience).