Jaguar and Land Rover: Tata Motors acquires a rich legacy
Domain-b.com— March 26, 2008

Tata Motors has just created history by acquiring the British marquee brands Jaguar and Land Rover, part of Ford Motors' Premier Automobile Group. With this purchase, Tata Motors has also acquired a slice of automotive history. Sourya Biswas looks into what the acquisition of these two names bring to the Tata Group.

Those who had derided Tata Motors' now successful attempt to manufacture the cheapest car in the world with the Nano, dismissing the move as being "down-market", may be forced to eat their words as the company completes the acquisition of two of the most famous names in the world of automobiles - Jaguar and Land Rover. And for those who took pride in this sensational achievement of creating a modern four-wheeler at the cost of a premium two-wheeler, this latest feather in Tata's cap is cause for additional joy.

Tata's worldwide expansion
The Tata group has always been held with tremendous respect in India, perhaps more than all other industrial houses, and is associated with almost all goods of everyday use. It was this ubiquitous presence of the Tata name that prompted two young visitors from Thailand to name their daughter "Tata". The said daughter grew up to become one of the most popular singing stars in Asia with a fan-following numbering millions. Tata Young also rocked India with her energetic performance in the bike thriller Dhoom.

But Ratan Tata, the current patriarch of the Tata group, was not contented with his business house being one of the best known in India. He wanted to extend Tata's name and influence throughout the world, and embarked on an era of rapid expansion. What started in 2000 with the acquisition of Tetley Tea and reached a new peak with the takeover of Corus Steel in 2007, has now reached its zenith with Jaguar and Land Rover coming into its fold. Or perhaps the zenith is yet to be reached. In the meanwhile, the group also made many major purchases like Nat Steel, Tyco, Millennium Steel and Eight O'clock Coffee.

The evolution of TELCO
This is the second major acquisition by the Tata Group Company Tata Motors in recent past. Exactly three years ago, Tata Motors had purchased the commercial vehicles division of crises-hit Daewoo Motors, even as its passenger cars section was hived off to General Motors. Building trucks has always been Tata Motors' forte, and the acquisition of Daewoo Commercial Vehicle only reinforced this claim. In fact, Tata Motors was earlier known as TELCO or Tata Engineering and Locomotive Company. However, exactly a decade earlier, Tata Motors had also ventured into the difficult world of passenger cars with the Indica. After initial teething problems, the Indica went on to create history as the first modern indigenous car.

In January this year, Tata Motors yet again created news around the world with the introduction of the cheapest car in the world - the Tata Nano. It also manufactures the cheapest sedan in the world in the Indigo CS, also unveiled at the Auto Expo in January. Now, Tata Motors has jumped from the world of low-cost vehicles to the realm of high-end luxury products with its acquisition of Jaguar and Land Rover from Ford Motors for a sum of around $2 billion. Although Tata Motors acquired them from the American automobile major Ford Motors, they are very much British in essence and spirit. We present here a brief history of the two marquee brands.

As British as pubs and cloudy skies
Jaguar is a brand that has epitomised luxury in British cars, just as British racing has been identified with Aston Martin. Although legendary fictional secret agent James Bond has traditionally favoured the latter, few can forget the green convertible driven by Gustav Graves' henchman Zao, in the movie Die Another Day. That was the Jaguar XKR Roadster. It gave quite a fight to the Aston Martin Vanquish being driven by 007. Of course, the rotating machine-gun and mortars featured in the movie do not form part of standard equipment.

The brand's "Britishness" can be determined from the interesting fact that it is one of the few trademarks to hold Royal Warrants of Appointment from both Queen Elizabeth and Prince Charles. Such warrants have been issued for centuries to those who supply goods to the British royal family, and enable the suppliers to advertise this fact, lending them an air of prestige and exclusivity.

At present, the Queen, her consort the Duke of Edinburgh, and the Prince of Wales can grant such honours. Warrants issued by the Queen Mother automatically expired five years after her death in 2002. Several other royal families allow trades people to advertise royal patronage, including the ruling dynasties of the Netherlands, Denmark, Thailand, and Sweden.

The early years
This illustrious brand had its humble beginnings in 1922 as the Swallow Sidecar Company founded by two motorcycle enthusiasts, William Lyons and William Walmsley. The company was originally located in Blackpool but moved to Coventry in 1928 when demand for the popular Austin Swallow overshot the factory's capacity. Today, Jaguars are assembled at Castle Bromwich in Birmingham and Halewood in Liverpool after the historic Browns Lane plant closed in 2005. Tata Motors has assured the employee union that both these factories will continue to operate without any retrenchments after the takeover.

The Jaguar name first appeared in one of the company's products in 1935 - a 2.5L sedan named the SS Jaguar, where "SS" stood for "Swallow Sidecar". After World War II, the company was force to abandon the "SS" name because of the unfortunate connotation with the Nazi secret police, the Schutzstaffel. Hence, it adopted the "Jaguar" name in 1945.

Evolution over the years
Jaguar went through a lot of mergers and de-mergers over the next few decades. It bought the Daimler Motor Company, which had acquired the right to use the "Daimler" name in Great Britain from Gottlieb Daimler himself, in 1960. This company was different from the more-famous Daimler-Benz of Germany, and was a part of Birmingham Small Arms Company from 1910 until its acquisition by Jaguar, who then used the brand for its premium models.

Jaguar merged with the British Motor Corporation (BMC) to form British Motor Holdings (BMH) in 1966. BMC had earlier been created by the merger of the Austin Motor Company and the Nuffield Organisation (parent of the Morris car company, MG, Riley and Wolseley) in 1952. Then came the merger with Leyland in 1968, which had already acquired Rover and Standard Triumph. The resultant entity was named the British Leyland Motor Corporation (BLMC).

In government hands…
However, BLMC came under severe financial difficulties, which resulted in the Ryder Report of the UK's National Enterprise Board recommending government support, and effective nationalization in 1975 when the company was renamed as British Leyland Ltd (later simply BL plc).

In the 1970s the Jaguar and Daimler marques formed part of BL's specialist car division or Jaguar Rover Triumph Ltd until a restructuring in the early 1980's saw most of the car manufacturing side of BL becoming the Austin Rover Group from which Jaguar and Daimler were excluded.

…and out of it
Jaguar was floated on the London Stock Exchange in 1984 by the Thatcher government and subsequently purchased by the Ford Motor Company in 1990 for $2.5 billion. In 1999 it became part of Ford's new Premier Automotive Group of foreign automakers, along with Aston Martin, Volvo Cars and, from 2000, Land Rover; Aston Martin was subsequently sold off in 2007.

Jaguar's racing legacy
Jaguar was one of the first entrants to the then-nascent world of competitive racing, and registered victories throughout the 1950s in the grueling Le Mans 24 Hours endurance race. Jaguar dropped out of the event after these initial successes but returned triumphantly in the 1980s as an engine manufacturer for the Tom Walkinshaw Racing team.

In Formula 1, Jaguar's successes of Le Mans have not been replicated. Ford bought out Jackie Stewart's Stewart Grand Prix Formula One racing team in 1999 and renamed it Jaguar Racing. Jaguar Racing participated in Formula 1 from 2000 to 2004 but achieved only two podium finishes in these five seasons of competition, after which it was sold off to Red Bull founder, Austrian billionaire Dietrich Mateschitz. The team's current avatar is Red Bull Racing.

The billions involved
Over the years, Ford spent close to a total of $10 billion on the brand but failed to return a profit. After incurring heavy losses for two consecutive years in 2006 and 2007, Ford decided to cut its losses and finally sold off the brand in March 2008. Now the "Jag" is part of the Tata stable.

The Land Rover story
The story of the Land Rover began with the launch of a pioneering civilian all-terrain utility vehicle at the Amsterdam Motor Show on 30 April 1948. Now, the name is a common brand for several distinct models, all four-wheel drive. It has had a succession of owners over the last six decades, starting from its parent Rover, to British Leyland, British Aerospace, BMW and Ford. Now, it forms part of Tata Motors who acquired this brand along with its sister marque Jaguar from Ford Motors.

Jaguar and Land Rover - fates converge
Long before the Mitsubishi Pajeros and the Toyota Land Cruisers and the Humvees, sports utility vehicles (SUV) and all-terrain vehicles (ATV) meant only two names - Jeep and Land Rover. In fact, Jeep and Land Rover are the two oldest SUV names in automotive history.

The first Land Rover was designed in 1947 when it was still part of the Rover group. The latter became part of the Leyland Motor Corporation (LMC) in 1967, which was subsequently merged with British Motor Holdings (BMH) next year to become British Leyland Motor Corporation (BLMC). This is where the fates of Jaguar and Land Rover converged, as the former was already part of BMH.

Jaguar and Land Rover — fates diverge
BLMC, renamed as British Leyland Ltd (later simply BL plc), underwent a major restructuring in the late 1970s and early 1980s where the mass-market car section was hived off as the Austin Rover Group in 1982. Jaguar and Daimler were not part of this group. This was after nationalization in 1975 and a major cross-holding arrangement with Honda in 1979.

Jaguar and Land Rover — fates converge again
The Austin Rover Group was taken over by German automobile major BMW in 1994, who sold off the company in 2000 after splitting it into three parts. The Mini marque was retained by BMW; Land Rover was sold to Ford Motors for an estimated sum of $3 billion (although BMW retained the Rover trademark), while the rest became MG Rover, and was bought for a nominal £10 in May 2000 by a specially assembled group of businessmen known as the Phoenix Consortium. Ford Motors had already bought Jaguar in 1999, leading to a common home for the Jaguar and Land Rover brands.

Tata's Rover experience
This was the Rover with which Tata Motors had had an earlier association. After the initial success of the Indica on Indian shores, Tata Motors sought to diversify in foreign lands, and tied up with MG Rover to retail the Indica as the CityRover in 2003. This venture collapsed in 2005 when MG Rover became insolvent and the physical assets of the collapsed firm were sold to the Chinese Nanjing Automobile Group.

Shanghai Automotive Industry Corporation, who held the intellectual property of Rover 75, MG Rover's first product, announced their intention to buy the Rover brand name from BMW. However, Ford beat them to the race and acquired it in 2006 to protect their right to the use of the name Land Rover, whose assets they had already bought in 2000.

The evolution of the Land Rover
As we have said earlier, the first Land Rover was designed in 1947 and unveiled in 1948. The early inspiration was the iconic Jeep of World War II. A distinctive feature was their bodies, constructed of a lightweight rustproof proprietary alloy of aluminium and magnesium called Birmabright. This was born out of necessity owing to the shortage of steel after war and abundance of aircraft aluminium.

This corrosion-resistant metal alloy helped build the Land Rover's legendary reputation of toughness and durability. This especially endeared Land Rover vehicles to the British Army and the farming community. Although it did lose some ground to Japanese imports in the 1970s and 1980s, it regained its standing with improvements in engine and chassis.

In 1970, Land Rover had introduced the luxury SUV Range Rover that has enjoyed considerable popularity over the years. In its latest avatar as the Range Rover Sport since 2005, it is of the most off-road capable vehicle on the road today. In fact, in the acclaimed motoring show Top Gear on BBC, host Jeremy Clarkson had pitted it against a Challenger tank. Land Rover's Wolf is also famous for being the primary utility vehicle of the British Army. The 75th Ranger Regiment of the United States Army also adapted twelve versions of the Land Rover that were officially designated the RSOV (Ranger Special Operations Vehicle).

Popular in military circles
The main reason Land Rover models, especially the Defender, are so popular for military use is their amazing off-road capabilities, surpassing even the famed Humvees. Another useful capability is their availability in a huge variety of body styles, ranging from a simple canvas-topped pick-up truck to a 12-seat fully trimmed Station Wagon.

Both Land Rover and out-of-house contractors have offered a huge range of conversions and adaptations to the basic vehicle, such as fire engines, excavators, 'cherry picker' hydraulic platforms, ambulances, snowploughs, and 6-wheel drive versions, as well as one-off special builds including amphibious Land Rovers and vehicles fitted with tracks instead of wheels.

Land Rovers in popular movies
Land Rovers have made several prominent appearances in popular movies. These include The Gods Must Be Crazy in 1980, to more recent appearances in Lara Croft: Tomb Raider, Ace Ventura, Hotel Rwanda and the Bond film The Living Daylights. They have also been featured prominently in the Mission: Impossible III and the Oscar-winning The Queen.

Conclusion
Considering that Jaguar and Land Rover are two of the most well-known automotive names in the world, and that Ford had acquired them for a collective cost of about $5 billion almost a decade earlier, Tata Motors seems to have got them at a steal at $2 billion.

However, considering that Ford had been unable to translate the enormous name recall of these brands into hard cash, one realizes that the Tata management has its task cut out. With the seamless integration of the much-larger Corus's operations with Tata Steel within a few years of its acquisition, this seems distinctly possible. Tata Motors now has the amazing repertoire to cater to all economic strata with its products. With this acquisition, the name of Tata shines brighter in the world.