Tata Motors and Land Rover

Land Rover has experienced a rather tumultuous past when it comes to the ownership of the brand. Previous owners have included various incarnations of the Rover, Leyland Motors, and British Leyland companies, BMW, and Ford. In 2008, Tata Motors acquired the Jaguar and Land Rover businesses from Ford as part of a package deal worth $2.3 billion. Under the Ford banner, Land Rover and Jaguar became associated companies, sharing some vehicle components and a distribution network via Jaguar Land Rover retailers. The effects of Ford ownership are still being felt in Land Rover products. The 2012 Range Rover Evoque uses an engine derived from Ford technology. Conversely, the new Ford Explorer is now available with a system very similar to Land Rover’s Terrain Response®.

When it was announced that an Indian company was taking over the Jaguar and Land Rover brands, many watchers of the domestic U.S. automotive market were cautiously optimistic. Here in the U.S., Tata Motors was an unknown entity. The company has no dealerships and sells no Tata-branded passenger vehicles into this market (the caution). However, Tata Motors is India’s largest second largest* vehicle manufacturer and perhaps more importantly, it is profitable (the optimism). The company employs 50,000 worldwide and ranks as the world’s fourth largest truck manufacturer.

Passenger, commercial, and military vehicles are just one aspect of Tata’s global operations. The Tata Group is comprised of 114 companies held under the Tata Sons umbrella. The conglomerate is involved in communications, engineering, materials, services, energy, consumer products, chemicals, and more.

Tata Motors’ Products

The company’s passenger car division produces several models under the TATA brand. Some of these include the Manza (small sedan), Indica Vista (sport hatchback), Indica (hatchback), Indigo (sedan), Indigo SW (wagon), Safari DiCOR (sport utility vehicle), Venture (van), Aria (crossover), Grande MK II (sport utility vehicle), Sumo (sport utility vehicle), and the Xenon (pickup truck). The vehicle most well-known to us in the U.S. would have to be the TATA Nano. The Nano received a great deal of press over the past couple years for being the least expensive car in the world (at the moment). To cut the cost of the Nano to a minimum, Tata designed the car to have no opening rear hatch, only one windshield wiper, no power steering, three-lug wheels, no radio, and a two-cylinder engine. As of today, the TATA Nano costs a little over $3,000.00.

Under the stewardship of the Indian automaker the Land Rover brand is doing well, despite the economic downturn and the unfortunate fact that the Jaguar side of the business has lagged.

Under the stewardship of the Indian automaker the Land Rover brand is doing well, despite the economic downturn and the unfortunate fact that the Jaguar side of the business has lagged. Recently, Forbes published an article titled “Ford Traded In Keys To The Wrong Luxury Cars” that sheds some light on the fallout of the Tata Motors acquisition of Jaguar Land Rover. The article describes how the Land Rover brand is thriving under Tata. Meanwhile, Ford’s native luxury brands continue to falter due to overzealous badge engineering, which has taken a steep toll on the exclusivity and value of the Lincoln brand and contributed heavily to Mercury being closed in 2010.

The Future of Land Rover Under Tata Motors

Tata has indicated it will be making some significant changes to the manufacturing side of Land Rover linked to its rapid growth in developing markets. The company is getting closer to manufacturing Land Rover vehicles in China and has already opened an assembly plant in India for the Freelander 2. Both the China and India operations will produce vehicles for their respective markets, which allows the company to tailor vehicles suited to the tastes and demands of regional buyers. The Indian plant assembles “complete knock-down” kits supplied by Land Rover’s operations in the UK.

Land Rover’s new model pipeline is currently well-stocked. The all-new 2012 Range Rover Evoque will be going on sale in the U.S. within weeks. The Range Rover itself will receive a major update for the 2012 model year and the LR4 will enjoy some evolutionary changes. For the 2013 model year, a diesel-electric hybrid based on the Range Rover Sport called the Range_e is expected to go on sale. In the more distant future we can expect a new Defender, the concept for which will be shown at the Frankfurt Auto Show.

Despite these promising new products, the specter of poor reliability still hovers over the brand. Land Rover vehicles routinely score well on customer satisfaction indexes, but the brand suffers gravely from a pervasive reputation for below average quality. Tata Motors must address these concerns aggressively with new models and on evolutionary updates to existing platforms. If Land Rover can manage a Kia-like turnaround in product quality and quality perceptions, it should have a very bright future ahead of it.

*Mahindra very recently overtook Tata Motors as the largest automaker in India. Whether or not this title stays with Mahindra over the long term remains to be seen.


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