Report Says Tata Would Sell Jaguar Land Rover

There was an interesting article in Bloomberg earlier in the year about Tata thinking about selling Jaguar Land Rover. Tata naturally denied the rumours however it is known that Jaguar will work with BMW on some electric vehicles. In today’s economic climate, it is sensible for many manufacturers to do joint work with their competitors – it helps spread the cost.

Bloomberg suggested that Tata were looking for at least a minority stake being bought by another entity. It is clear that the company needs a financial injection, it has  $1B of bonds that mature over the next 12 months which will need to get covered or renegotiated. In addition the Jaguar Land Rover company has mostly posted losses each Quarter and has recently reduced its workforce quite considerably.

Jaguar Land Rover is pushing hard into electric power – even with a racing team in Formula E as a marketing exercise which is reminiscent of the Le Mans racing of the 1950s. The company is changing its spots and as such will need a large amount of investment to get new products to market, which is what they are doing with several new electric Jaguars coming to market. However, those new electric Jaguars are built by Steyr in Europe and not in the UK at the moment.

Brexit would be an issue only in that it creates uncertainty in various markets. No matter what happens when Brexit occurs, all manufacturers will be looking at ways to continue to sell cars. Jaguar Land Rover has factories in Europe and the UK, so feasibly could continue to sell vehicles built in each region, thus negating any tariffs that might be applied.

It is also known that Tata has made some mistakes in their home market of India. They canned a new sports car brand and have struggled to sell commercial vehicles. The Tatamo brand really shouldn’t have been created – instead they could have used a Jaguar branded model and used the technology available rather than creating a whole new vehicle.

Jaguar Land Rover is in an interesting place, it needs to compete with a wide range of competitors and has to keep its heritage alive. Like everyone else, they have moved more into SUVs despite being the first to market with a luxury SUV in 1969! They had to get into electric power early otherwise they would have collapsed by now. If they can get the price point right with a good design, then they will succeed, however the market is rapidly getting full of competitors all hungry for a slice. The other European and Japanese manufacturers have larger footprints and probably lower cost of manufacturing – especially when you built a wide range of vehicles sharing the same parts.

It wouldn’t surprise us here at Motoring Weekly if Tata found a technology partner to buy their kit or to finance new technologies that become mainstream. We don’t think any of the major manufacturing groups would buy the logos, it would be cheaper to let them die and take market share without paying for it.