Nick Hasell
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Tata, the Indian conglomerate, has emerged as the front-runner to buy Jaguar and Land Rover, as the turmoil in world debt markets makes it more difficult for private equity firms to secure funding.
Ratan Tata, the chairman, has formally confirmed his company’s interest in buying the marques, which have been put up for sale by Ford, the struggling American carmaker.
“It will give us more of a global presence,” he said in an interview. “It is to give us scale and global reach as we take ourselves away from subordination to a single economy.”
Tata is understood to be one of only two likely trade buyers for Jaguar and Land Rover. The other – Mahindra & Mahindra, a maker of 4x4s – also hails from India.
The sale, on which Ford says it does not expect to make an announcement until the end of this year or early in 2008, is thought to have drawn preliminary interest from at least five private equity firms. However, corporate financiers believe that their chances of prevailing in the $1.5 billion (£745 million) auction have been hit by the near-shutdown of the credit markets since late July.
Three of the firms are being advised by former Ford executives. Texas Pacific Group has retained Bob Dover, once chief executive of Jaguar and Land Rover. Jacques Nasser, the former Ford chief executive, has teamed up with One Equity Partners. Sir Nick Scheele, Ford’s former president and chief operating officer, has joined forces with Ripplewood.
Other buyout groups known to have expressed an interest are Cerberus Capital Management and Apollo Management.
Pre-tax losses at Jaguar in the UK halved last year from £535 million to £258 million, while Land Rover made a profit of £99 million.
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Tata is on the asendency. Tata builds super tough trucks and cars for Indian roads. You will find the "T" symbol all across Asia, Middleeast and Africa. These cars and trucks are the only thing that will survive toughest roads(if you can call them roads) on the planet. The T symbol is lesser known in Europe and USA. As Europe and N. America decay under fiscal impropreity and demographics, their roads too (and not too far in the distant future) will resemble those of Africa and India making them suitable for tata vehicles. Perhaps at that point they will rebrand the Jags and the Rovers with the T symbol again.
Atat Natar, Persiville, India
Out here is the US, neither Jag nor LR are ever referenced as being high quality or long lasting products. Infact when you drive, you dont see that many of these either. In general Ford cars are considered as being poorly built. The big sellers now are obviously the Japaneese Toyota's and Honda's.
If these companies are sold to Tata, it might actually revamp the sales of these vehicles. Plus TATA is likely to add a few economic brands of their own, so they are likely to cover the entire spectrum of cost. TATA makes and sells a lot of cheap cars in India and they are known to be of good quality too. It's gonna be a little different here due to the higher speeds and safety standards involved. Looks like TATA has hopes of a global automaker.
Nitin, Boston, USA
Hilarious to see American-origin comments castigating Indian quality of production. American cars are hardly known for their quality. Hence the reason GM and Ford are struggling and Detroit (the home of automobiles) is on the verge of becoming a manufacturing ghost town. Good luck to the Indian's I say.
Jayesh Patel, Bourenemouth, England.
It will be very bad for LR and Jag. TATA makes rubbish vehicles and will kill the brand names of these two great brands. I have a LR and if its bough by TATA i will not buy a another from LR as i dont want a India car...
Udash, manchester, UK
TATA is known to be a very big and cash rich group from India. They have shown there big interest in British automotive industry by first entering into British market with CITY ROVER... which is completely out fashioned car for British roads.
With Jag and LR they need to be very very focused what they are up to.
Lot of people might not be happy with prestigious American owned British brand to bought by INDIAN company. TATA management have to work really hard to recognize Brand value of Jag and LR.
Adrian, Leamington spa,
If you think sales of Jaguar are bad now, wait until the impression sets that it is an Indian car. Do you really think that someone looking for a luxury car will pass up a German Mercedes over an Indian Jaguar? Not a chance. How long until we start seeing Jaguar and Land Rover-based Tata vehicles? Or worse, Tata-based Jaguars and Land Rovers? What about when Indian Jaguars are discounted so much to try to encourage sales that they become just another third-world cheap import? This will be the end of these brands. Current Jaguar and Land Rover owners get ready for your cars to lose whatever little resale value they still hold.
Alex, Las Vegas, USA
Tata's are not new to British Industry, they already have their presence - Tetley (Tea & Coffee), Bruner Mond (Soda Ash & Chemicals) and Corus (British Steel) in their fold. Jaguar and Land Rover would make their portfolio bigger and ofcourse the Group will have more business presence in sales and revenue terms as compared to India.
R V Subramanian, Mumbai, India
WHAT ABOUT MG,S BEING BUILT IN CHINA. PS, I DRIVE A GERMAN CAR MERCEDES-BENZ. LET THE INDIANS BUILD JAGS AND LANDROVERS,I SAY WELL DONE TO THEM.
JAMES SMITH, LOSSIEMOUTH, SCOTLAND
Indian ownership of these two brands would absolutely mark the death of them. Nobody in their right minds would pay luxury prices for "Indian" cars. Might as well be Peruvian or Nigerian luxury cars.
Rick Brewster, USA, USA
Almost all cars on British roads are now officially made by the Japanese, Europeans or Americans.
Not surprising then that only PE firms or overseas buyers would want the Jag or the Landrover - there's no logical British trade-buyer, unless Richard Branson wants to start 'Virgin Cars' !!
Udaiveer Anand, London,
Why would an Indian owner be inferior to Ford? What is Ford's 'pedigree' in the luxury and off-road markets? Lincolns and Ford Broncos or F-150s?
The S-type, was paired to a Lincoln and the X-Type to a Ford Mondeo; under Tata management one would have 'pure' Jaguars and LR's, surely this ought to satisfy the purists who would attribute elevated status to a Merc or BMW for their as they do not share thier platforms.
The issue is keeping an illustrious brand alive and this enriches the motoring map and gives purchasers another option. Complaining that the X-type is based on a Mondeo is rather silly as most car manufacturers to this these days. Does anyone mind that a Saab 93 is based on an Opel platform? Or that a Lexus can be has as a Toyota in Japan or that Infiniti models are based on Nissans? Brits have made the BMW 3-series the best selling car in its class in the UK, but when I sit on the back seat, its cramped and one feels the vibration of the rear wheel drive...yuck!
Philip Panayiotides, Geneva, Switzerland
Land Rover - Over priced British Junk. Put it on the scrap heap!
ADRIAN BURFORD, Worcestershire, England.... Land Rovers, built to last? Have you ever bought one? Only the Brits ever think their handful of foreign-owned, British made cars have any worth and quality.
Land Rover has one of the worst car dealership networks of any car manufacturer on earth! TATA would probably put this straight even with their limited supply-chain in the UK. Electrical problems galore on their Discovery series with rubbish quality throughout the vehicle! I am glad I went for a test-drive and I'm even more thankful I never bought one. Good riddance to the British automobile industry! Those engineers will happily take their fat redundancy cheques and work in Chinese Bank call centres when the time comes, or maybe move to Spain like the rest of the "skilled worker" class.
Asian's are willing to learn, and I would put good money on them producing far superior vehicles within the next 5-10 years
John O'Driscoll, Dublin, Ireland
British companies are bought and sold all the time. You ignorant fools are so concerned about the companies of the past; you ignore the fact that your next generation of entrepeneurs are struggling in the global marketplace. Old ideals and mind-sets die very very slowly in Britain, move on, adapt... this is the Asian Century guys! (had you not noticed when the richest people in your country are from India and the Middle-East?)
Land Rover and Jaguar are from a different era, a blip in history when Britain was competitive in all important industries and could wield the influence abroad. Learn to manouevre more intelligently in your creative industries and support your entrepeneurs. At least give them a chance, otherwise they will just keep on leaving for pastures new.
I am actually puzzled as to the reason why an Indian company growing into a corporate superpower would want to buy a British relic though. Hopefully they will put the Brit-Junk to better use.
James Downing, Charlottesville, Virginia, USA
FAO ryan - think you might have got your knowledge of Hindi and your interpretation of Tata mixed up as Tata does not mean what you think it does.
As for Tradition, Tata have over 50 years experience and to date, "Pedigree" companies have not exactly done a great job so Tata / M and M can only get better.
NP, London, UK
If someone who wants to buy JLR, and wants to make it florish, then what is the problem? JLR are both starting to bloom, and although Jag has taken a while with many wrong decisions, it is definately moving in the right direction.
If JLR is sold, then what is the problem from moving from an American Company making a loss to an Indian Company making a profit? JLR will still remain British with engineering and manufacturing continuing here!
By the way nothing official has been released, so continuing rumours is irrelavant.
PS Ryan - Which translator are you using?
Mistry, Leamington Spa, UK
I agree with Scamp -- is there really no domestic interest in these sorts of brands. It is embarressing . . .
Mike, Singapore,
What goes around, comes around...
Faisal Ali, Bradford, UK
Looks like Mr.Dryden is bitter and twisted living in a city formed by a person nearly as famous as the Land Rover Brand namely Queen Victoria.
The two are very simular hard faced, built to last, and both typically British with a go anywhere attitude.
ADRIAN BURFORD, Worcestershire, England
I can't believe Jaguar and Land Rover are not being aquired by a company that has pedigree and motoring tradition.... By the way did you know that 'tata' means 'bollocks' in hindi
ryan, houston, usa/texas
Why the hell should Jaguar be saved? Jaguar has run at a loss for as many years as I can remember. They make far too few cars to be viable, and even then nobody wants to buy them. They have been cutting production year on year, Q1 2007 they made 27% fewer cars than 2006. The S-type is just a re-bodied ford mondeo, and unfortunately people know it.
Land Rover on the other hand deserves to survive. The company makes a profit, it makes a large enough number of cars to be viable, and the cars they make are sold easily enough. If you order a new Land Rover, you will have to wait 25 weeks for it. Land Rover production was up 17% in Q1 2007. They can't build them fast enough. Sure, they need to do something about quality, but the new Freelander and Discovery 3 are addressing these points.
Selling them as a pair will just cause pain for the purchaser, and Land Rover will continue to finance a lame duck as it has done for the last 30 years. Time to stop flogging the dead (jaguar) donkey.
Jon Turner, Luxembourg, Luxembourg
Looks like I won't be buying another Jaguar or Land Rover. It would be comforting to think that all those Oxbridge morons in management and stalinist thugs in unions at Coventry would be alive still to lose their pensions as punishment for their gross stupidities and intransigencies. Not likely though. Probably drunk 'emselves to an earlier grave than Britain faces.
Alex Dryden, Ottawa, Canada
Are we completely and utterly mad?
Why isn't the City putting together a consortium to buy these companies?
Scamp, Aberdeenshire,