Mumbai: When Tata Motors Ltd bought Jaguar Land Rover (JLR) for $2.3 billion in 2008, it quickly became apparent that the Indian auto maker couldn’t have chosen a worse time for an acquisition of that magnitude.

The collapse of the mortgage market in the US had set off a financial crisis and no one with cash was in any mood to lend it.

Amid talk of the UK government contemplating a bailout of JLR, Tata Motors’ market value plunged to 6,503.2 crore, with the stock hitting rock bottom 126.45 on 20 November 2008. The market capitalization was less than what it had paid Ford Motor Co. for the legendary British marques.

Also Read | JLR turnaround (Full Story)

In the fiscal ended March 2009, Tata Motors posted its first annual loss in at least seven years after sales at the luxury unit plunged amid the global slump.

The consolidated net loss was 2,500 crore in the year ended 31 March, compared with a profit of 2,200 crore in the year earlier. The JLR unit made a pretax loss of 1,800 crore as unemployment and the financial crisis damped sales in the US and Europe.

Only two years later, however, JLR has turned around spectacularly. With JLR accounting for more than half of Tata Motors’ business, the company posted a 100-fold jump in profit in the three months to 30 September. The UK subsidiary has been generating a cash profit for the last four quarters.

Favourable external factors, including currency movements and a rebound in demand for the luxury marques, may have aided the turnaround, but JLR’s comeback is more than a result of fortuitous circumstances. The foundation for the transformation was being laid even during the painful months of struggle that followed the acquisition.

Mint chronicles the story of the turnaround, how an Indian company that specialized in cheap small cars on the one hand and trucks on the other succeeded where an iconic auto maker, and others before it, had failed.