Mumbai: If the Tata Group does drive off with US auto giant Ford’s iconic British brands Jaguar and Land Rover, it would be another feather in its cap after buying European steelmaker Corus earlier this year.
Tata’s bid of $2 billion likely to be accepted by Ford
British media reports say loss-making Ford could announce as early as Friday that the Tatas, reported to have bid around $2 billion, had been named the top choice for buying the storied luxury carmakers.
It would be the year-end icing on the cake for the Tata Group, which bought Corus for $13.7 billion in January, and also another sign that cash-flush corporate India’s foreign acquisition drive has shifted into high gear.
Tata’s chief executive, 69-year-old Ratan Tata, credited with transforming a sprawling, unfocused tea-to-trucks conglomerate into a global player, had long promised the group would “spread its wings far beyond India.”
If the family-run conglomerate gets Jaguar and Land Rover, it will be in the unusual position of manufacturing two of the world’s most prestigious cars as well as one of the world’s cheapest.
Tata plans to unveil in January its “people’s car” priced at Rs 1lakh, aimed at getting more of India’s working poor off their motorbikes and into cars.
Tata officials in New Delhi had no comment on Thursday on an article in Britain’s Birmingham Post quoting an unnamed source at Land Rover as saying: “It is definitely Tata.”
“We’re keeping our fingers crossed,” said an official, who did not wish to be named. The Birmingham Post quoted union leader Des Quinn as saying the Tata bid “is in the best interest of our members.”
“They come from a manufacturing background, and the experience of other people they have taken over has been good. They are cash-rich and they can afford the price, as well as invest in the future,” Quinn was quoted as saying.
“The deal is prestigious and the (new) brands could emerge as strong revenue earners over a long term of five to six years,” said Mahantesh Sabarad, auto analyst at Mumbai brokerage Prabhudas Lilladher.
“We do not see a loss in brand value for the luxury cars if they move to the Tatas,” he added, a reference to complaints by US car dealers, who felt Indian owners would be a turnoff for upscale buyers.
An announcement in favour of Tata would mean the Indian group had beaten off competition from rival Indian firm Mahindra and Mahindra and private equity group One Equity Partners.
London’s The Times newspaper quoted Ratan Tata as saying he saw no conflict of interest in having a diverse portfolio starting from the “people’s car” to Jaguar and Land Rover.
“How a company manages products in different sectors is the key. Toyota created Lexus, Nissan has Infiniti. No one is saying ‘how can BMW handle the Mini?´ But they’ve made a huge success of it. So why is it impossible?” he asked.
On Thursday the Tata Group was named the world’s third most accountable and transparent company by Britain’s One World Trust, an independent research group. General Electric and GlaxoSmithKline were rated numbers one and two.