Tata Buys Land Rover And Jaguar. Now It Has To "Nano" Them.

Posted by: Bruce Nussbaum on March 27, 2008

There is, of course, a certain historic irony to the ex-colony coming to the rescue of the imperial power—India’s fast-growing Tata Group buying the very British Land Rover and Jaguar. But wait—that’s already happened. The U.S. did that with Ford—and failed, at least with Jaguar. So Tata is buying the brands from Ford. Now it is up to yet another ex-colony to give new life to two venerable brands. And despite huge skepticism, especially in the British press, I think Tata is up to it.

The truth is, Tata Motors is proving to be a key innovator on the global scene with the Nano car. And if the parent Tata Group doesn’t

lose its courage, it can bring the same innovative spirit and talent to remaking Jaguar and Land Rover. Tata has promised the British unions and government that it will make no serious changes in management and production and it basically has to break that promise if it is to give new life to Jaguar and Land Rover.

With the $2,500 Nano, Tata reengineered not only the car itself but the assembly and sales model. The biggest innovation, in the end, was in the business model. Bypassing expensive, big dealerships by building the Nano so it can be assembled in village garages, is a brilliant innovation in distribution. Using reverse-auctions to cut the cost of parts is another smart innovation. So is modularity. The same kind of game-changing, disruptive innovation is needed for Jaguar and Land Rover.

It will be all-too-easy to shift engineering and, in the end, even manufacturing to lower-cost India from high-cost Britain. Tata needs to re-imagine the whole process of developing and producing high-cost autos, just as it did with low-cost cars. But it will need courage to do it.

Reader Comments

Jose

March 27, 2008 5:01 PM

I hope that Tata brings some sense to that pretentious Land Rover NA crap that we are used to here in the USA and bring vehicles for all crowds... Defender 90, 110, 130 and Discovery Base Model with TDV6s diesel engines. All the pompous prices are driving lots of people away into TOYOTAS ! Bad for the current times !!

dr.george easaw

March 27, 2008 6:05 PM


Employing the latest in supply chain management like delayed product differentiation and shifting the push pull boundary closer to the dealer, Tata is surely bringing the same shakeup in the system as Henry Ford did with the assembly of the Model T in the the early 1900s..

Arvind Saharan

March 27, 2008 6:43 PM

Buying Jaguar & Land Rover will give more publicity to Tata's fame worldwide. This will increase their buisness globally. Best of luck to them.

Sid Ramnarace

March 27, 2008 7:08 PM

The acquisition of Land Rover and Jaguar is certainly a large spoonful for Tata. The fact that a Fortune Five corporation could not solve the woes of these brands underscores the challenge facing Tata.

Under Ford, Jaguar had a myriad of product plans and revised strategies that at one point would have them go toe to toe with BMW and Mercedes-Benz offerings. Under the umbrella of Ford's Premier Automotive Group and the leadership of Wolfgang Reitzle (the product whiz responsible for cars like the E39 BMW 5 series and the BMW Z8) who was recruited from BMW, Jaguar was set to redefine the luxury market. In keeping with the racing heritage at Jaguar, Reitzle had a plan to develop all new Jaguars with ultra-modern, lightweight aluminum frames and components. The XJ sedan and XK coupe are the only vehicles that benefited from that strategy. Unfortunately, other new product like the F-type roadster were stillborn, yet others like the X-Type and S-Type shared their underpinnings with more pedestrian Ford and Lincoln products. Reitzle left a few years into his tenure to become CEO of Linde AG and again the Jaguar and Land Rover strategy was retooled.

This mixed bag of strategies resulted in lukewarm reception once the products did get to market. J.D. Powers quality ratings never approached the gold standard acheived by rival luxury brands like Lexus. To be fair, Jaguar did top one J.D. Power rating: The Customer Service Index study. Translation? Sure, the customer had a good experience while their cars were being serviced - but their cars were being serviced!

jay

March 28, 2008 6:55 AM

Noel Tata is a genius.

Nephew of Ratan Tata,

will takover TATA Corporation.

This guy interned with KKR years ago, when they did the RJR NABISCO DEAL

the world isnt gonna know what hit them.. when he takes over

shawn

August 13, 2008 2:52 AM

Jaguar and landrover to me produced one of the finest cars in the world just about 5 years ago with the XJ8 before they turned all their cars to crap. You want to bring back the people who have the money to drive ellegant cars like jaguar not turn them away. A rich person wouldnt even pull up in the Jaguars they make now they would be eshamed. Tata is going to have to work very hard to keep the prestigious image of jaguar. I have seen Tatas cars and they have work to do. if Tata does not clean up the company real fast people will take their money elsewere to Bentley or Rolls Royce companys that are still paying attention to their heritage and putting all the new tech in their cars but keeping traditonal designs. No effence but i dont have much hope for the british brand under the new ownership and director ian callum. No effence again but he should have kept the same cars just put all the new tech into it not destroy it and make it look like a volvo. JAGUAR WAS MUCH BETTER THEN BMW, LEXUS, MERCEDES BENZ, INFINITI IT HAD A VERY ELLEGANT AND SPECIAL GRACE ABOUT IT.

Barrett

October 6, 2008 6:31 PM

This purchase should prove a new era for the two brands. I worked for both companies in the U.K., and times were dismal under Ford ownership, for Jaguar especially. I remember when Ford cut funding for the F-type how dismal morale was at Jaguar. They decided to allocate those funds towards the development of the TDV6 diesel with Peugeot/Citroen. Although a worthwhile pursuit, axing the F-type was the last straw for many veteran employees at Jag, an almost wholly British development. It just goes to show how a shortsighted, accountant run entity has no business overseeing such brands. Alternatively, Land Rover is proving quite profitable and successful. I absolutely attribute this fact to BMW's brief ownership, an entity more or less run by engineers. They spent billions of pounds on the facilities in Solihull (the current Range Rover production line is a thing of beauty in fact). In addition, quality of component manufacturers is also key to product success. The current Range Rover is a definite worthy competitor to the best in the industry b/c a large portion of it's components are produced by BMW part suppliers, much higher quality than any company supplying Ford's production.

Land Rover has been spared much of the problems Jaguar has faced due to the fact that many of the new models share components with Volvos (e.g., Freelander 2 or LR2). In addition, perhaps realising that BMW has put forth most of the effort to bring Land Rover up to specs, Ford allocated around $1 billion for Land Rover to develop the Discovery 3 (LR3) and Range Rover Sport, which have proven quite successful. This sum is necessary for developing a viable new platform. Compare this arrangement to the less than 200 million dollars Jaguar received for developing the X-type, an all around failure, rubbish of a car. How could we expect Jaguar to produce a viable, new platform to compete against market leaders like the 3-series, using components from substandard suppliers through Ford's network? It's an impossible feat as we have seen.

It can naturally be assumed that BMW part suppliers are far superior in quality to those of Ford's choosing, considering BMW produces luxury cars, and Ford doesn't. For Ford to expect the public to continually pay luxury car prices for a car produced with substandard components is ludicrous. It has just taken them almost a decade to realise their mistake (since the debut of the S-type, another rubbish car). The first thing Tata should do for these two brands is cut ties with any Ford supplier as fast as possible, and seek out the suppliers of their main competitors: BMW, Mercedes, and Audi, only then will Jaguar and Land Rover truly have the means to compete in the long term. The success of Land Rover over the past 5 or so years and the continual failure of Jaguar are living proof of this fact: COMPONENT QUALITY AND PROPER INVESTMENT LEAD TO SUCCESS.

Shawn

March 3, 2009 3:21 PM

I agree with the first post. I hope Tata cuts some of the NA models and gives us the Defenders back. I would fall over backwards to own the new Defender 110 that is for sale in the rest of the world. Tata can eliminate the low end puddle smackers they've been giving us over here.

Joe

March 19, 2009 7:40 AM

Levon, your comment cracked me up. You ignorant idiot!

Vasan

March 26, 2009 1:16 AM

TATA is a prestigious corporate in India which dates back more than centuries. They have diversified businesses in India accommodating more than 1.5 billion population which is not easy. Their think tank driving the business are way a head of the North American counterparts. Being the Direcctor of Finance of one of the Automobile Industry here in North America, I have seen how the business is run here.TATA for sure will excel and would bring a huge change to the acqusition of both brands.

langa

May 8, 2009 2:00 AM

vasan with you on that one

ANNETTE

June 30, 2009 2:31 AM

I LOVE MY 1997 LAND ROVER DISCOVERY BY BMW!!! I HOPE THAT TATA CAN MAKE LAND ROVER AS DEPENDABLE AS MINE. I SURE HOPE SO. SO IT HAS BEEN BMW, FORD AND CURRENTLY: "TATA FOR NOW"!!!

Sheroy Thomas

August 17, 2009 11:44 AM

As an Indian & as an owner on some Tata vehicles , i am proud of TATA.

Riaz Uddin

December 14, 2009 11:17 AM

TATA should consider devoloping cars for middle class people.

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Want to stop talking about innovation and learn how to make it work for you? Bruce Nussbaum takes you deep into the latest thinking about innovation and design with daily scoops, provocative perspectives and case studies. Nussbaum is at the center of a global conversation on the growing discipline of innovation and the deepening field of design thinking. Read him to discover what social networking works—and what doesn’t. Discover where service innovation is going and how experience design is shaping up. Learn which schools are graduating the most creative talent and which consulting firms are the hottest. And get his take on what the smartest companies are doing in the U.S., Asia and Europe, far ahead of the pack.

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