Right before the height of the first global financial crisis, Ford sold Jaguar and Land Rover to Tata Motors.
The sale, which was finalised for just $2.3 billion, gave the Indian company full control of Britain’s most famous brands.
Many predicted the move would be the beginning of the end for the two English brands, but fast forward three years and the investment has been a huge success for Tata and arguably a missed opportunity for Ford.
With tough economic times hurting sales of Tato’s famous Nano, Jaguar Land Rover are now generating a massive 57 percent of Tata’s revenue. The British brands have seen their pretax profit increase 20-fold to 1.12 billion pounds ($1.76 billion) for the fiscal year.
As it stands today, Tata and its Jaguar Land Rover division is valued at over $12 billion.
It wasn’t just a matter of good fortune that the brands have become successful, in fact, Jaguar is still striving to improve with sales down 27 percent for the last quarter. Land Rover on the other hand, has seen significant growth (up 22 percent for last quarter) following strong demand for its upmarket SUVs.
The Range Rover Evoque (CarAdvice is attending the launch in Europe next week) has already seen more than 20,000 pre-orders, despite not going on sale till September.
Tata is investing a massive $2.5 billion into Jaguar Land Rover product development each year to keep the flow of new products coming. This should see Jaguar offer a significantly larger range to turn the sales slide around.
The multi-billion dollar annual investment will see the development or upgrade of 40 new vehicles across the two brands over the next five years. The two that we look forward to the most are the Jaguar C-X75 supercar and an entry-level sedan to rival the Mercedes-Benz C-Class and BMW 3 Series.
The C-X75 is meant to showcase Jaguar’s engineering prowess and build its brand credibility to compete with its German rivals. The hybrid supercar can accelerate from 0-100km/h in under three seconds and run on electric power alone for around 50km.
Do you think Jaguar will ultimately become equal with Audi, BMW and Mercedes-Benz in its product offering and brand perception?