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Case Study: Jaguar’s Passage to India
In 2008, Tata Motors paid the Ford Motor Company $2.3 billion for U.K. based automakers Land Rover and Jaguar. Jaguar’s new owners face challenges of their own. Some have criticized the acquisition on the grounds that the brands are not compatible with the low-cost cars, trucks, and commercial vehicles that have long been Tata’s mainstays.
Tata Motors is a multinational corporation headquartered in Mumbai, India. Part of the Tata Group, it was formerly known as TELCO (TATA Engineering and Locomotive ...view middle of the document...
Moreover, JLR needed further investments, that too quickly, to keep the operations running. Besides this, the commercial launch of Tata Motor's small car Nano required much more time than anticipated.
1. Do you think Jaguar and Land Rover will prosper under the ownership of Tata Motors?
Tata Motors is currently in passenger cars, light trucks, medium and heavy trucks as well as buses. For the passenger car segment, Tata Motors serves the low income to middle income market; it does not have an existing luxury brand to compete with foreign counterparts such as Lexus, BMW and Mercedes Benz, ect.
If Tata Motors wants to create a luxury brand, it will be difficult for her and it will take years. India does not have a good reputation for luxury car brands. The most practical solution is to acquire well established brands to tap the luxury segment; a fast growing segment in Asia.
Tata Motors should supplement its distribution system to be able to use Jaguar Land Rover networks.
British based managers credit their new Indian owners with providing the capital needed for JLR to expand while avoiding the sort of overseas micro-management that they say stifled the company under Ford.
Jaguar and Land Rover should modify their dealing network and benefit from the growing of the middle and the upper middle class Indian population.
2. What do you think are the biggest challenges facing the Jaguar Land Rover in the few years?
3. Tata Motors recently introduced the Nano, the world’s least-expensive car. The Nano fits Tata's strategic goal of building a low-cost car for the Indian market. Can Tata succeed in targeting both the very low end of the auto market as well as the high end?
When it was launched less than a year ago, the $2,500 Tata Nano was promoted as a safe, ultracheap car for India's lower classes, an alternative to the motorbikes that zoom precariously around the country. To succeed in targeting both the very low end of the auto market the high end, Tata Motors must concentrate on the niche markets that means competing within a narrowly defined market segment with a specialized offering.