The sale process of Tata buying Jaguar and Land Rover (JLR) is almost done. Throughout the process, the entire auto industry analysts have unanimously said that the $2-billion reported bid price by Tata is too high and that JLR would be difficult buys at any price looking at their past history.
Ford Motors acquired Jaguar in 1989 and Land Rover in 2000. Both companies are now valued at $2 billion. Ford had paid $2.5 billion for the Jaguar and around $2.7 billion for the Land Rover from BMW. It still remains to be seen if Ford will decide to sell these brands to Tata Motors for a loss. The fact that even though these brands saw major losses in 2006, the year 2007 has seen a major turn around. These brands have churned out a profit margin that not only made a mark in 2007, but also covered their losses in 2006. This recently revealed fact is definitely not a good sign in favor of Tata if they are looking for a good bargain. On the other hand, this could encourage Tata to go all guns blazing and acquire the two brands at any cost.
I just hope that one of my fav Indian car companies who has seen so much success in the last few years, does not get blinded by the big names that Jaguar and Land Rover represent and dig a hole for itself in the coming year.
Article Submitted by J C Bose