Tata Completes Its Purchase of Jaguar and Land Rover

Ford [[f]] has completed the sale of its Jaguar and Land Rover businesses to Tata for roughly ½ of its original purchase price; while the Land Rover business is profitable Ford didn’t make a red cent from Jaguar.

(From the BBC) “Ford has completed the sale of its Jaguar and Land Rover businesses to Indian conglomerate Tata in a deal valued at £1.7bn.

The companies are being sold for £1.15bn with Ford paying £600m into the pension fund of the luxury brands.

The negotiations started last June and the deal was announced in March.

Ford is selling the firms to try and boost overall performance. Land Rover remains profitable but Ford has never made money from its Jaguar investment.”

I remain skeptical of Tata’s ability to profit off its purchase as the company doesn’t exactly have any experience in cultivating and managing a luxury car brand, plus this is situation is more of repairing and rehabilitating an ailing brand more than it is managing a strong one. It’s not like Tata purchased Porsche. I think where Ford and other past owners of the Jaguar and Land Rover brands have missed the mark is that they approached the situation as just adding a storied brand to their existing portfolio of products, instead of approaching it as a major turnaround/rehabilitation project.

So the question offered is: will Tata take the right approach or are they just thinking in terms of adding a well known brand to Tata Motors in hopes of elevating the overall operation?

Disclosure: at the time of publishing the author didn’t own a position in Ford or Tata.

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