Ford Motors Must Thank Tata Motors To keep Jaguar and Land Rovers Leading Brand Image


During financial crisis in 2008, USA automobile sector faced survival issue. Major company like GM and other even went for government loan to survive wherein Ford was trying to survive without the government support. They had many iconic brand and one of them was " Jaguar & Land Rovers" Brand. Based out of UK, Jaguar and Land Rovers got acquired by one company and then sold to another company and in 2008 nobody was willing to take the risk of taking that brand over.

At that point of time Tata Sons Chairman with his visionary eye catches the potential and acquired it in all cash transaction of $2.3 Bn. At that point of time all criticized or questioned Mr. Tata move but he was aware that if Tata Motors wants to go global then branding is very important and he took that risk.

The first thing he did is to inflict the confidence within jaguar & Land Rovers team that they can change everything and he is willing to invest without second thought. The interesting twist happened when he showed it employee by announcing investment plan for UK plan for modernization as well as generated thousand of Job in UK through supplier community of acquired Brand.

The trigger of trust by Mr. Tata on acquired brand motivated all ranks and best came out of them. By 2011, they started showing Y-o-Y growth and cutting edge design and received unconditional positive feedback from auto analyst. Mr. Tata moved further and did a strategic collaboration with Chinese auto firm and started producing the acquired brand to capture China market so that brand awareness and to mitigate the geographical based recession impact.

The downturn in Tata Motors domestic business and extra ordinary growth of acquired brand helped Tata Motors keep generating $bn of profit an free cash flow and keep continuing investing in new product line.

It is interesting to note that Tata Motors acquired iconic brand is generating one and half times of profitability w.r.t acquisition price. The respectable margin and profitability enabled Tata Motors to continue upped its arm length in R&D and modernization of assembly plant which in turn will give exponential return to its investor.

The UK government and Ford Motor must thank to Tata Motors as well as Mr. Tata for their conviction in acquired brand and associated resources. Keep going...

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