Tata considers more Jaguar/Land Rover cuts after massive loss
2010 Land Rover LR4 – Click above for high-res image gallery
India's Tata Motors has reported a net loss of $520 million (25.05 billion rupees) for the fiscal year ending in March of 2009. Over the same period one year earlier, Tata managed to earn 21.68 billion rupees in profit. What gives? Naturally, the global economic meltdown didn't do the automaker any favors, but the main problem can be sourced back to the poor performance of Jaguar and Land Rover, which the Indian automaker purchased from Ford last year with the help of a $3 billion bridge loan.
The fact that Jaguar Land Rover accounted for $504 million of that $520 million total loss means that more job cuts and plant shutdowns are in store for the ailing British duo. Says Tata Vice Chairman Ravi Kant:
We have sent people on sabbatical, gone for cheaper low-cost country sourcing and tight control in cash flows, and are assisting JLR (Jaguar Land Rover) for a major belt tightening.Earlier this month, it was reported that Tata was in search of some £1 billion ($1.5B) in cash and underwriting help to pump into the JLR operations.
Gallery: 2010 Land Rover Discovery 4
[Source: Reuters]
Reader Comments (Page 1 of 3)
AzureStarline 4:06PM (6/26/2009)
Is anyone else wondering how these two brands keep hanging on? When was the last time either brand (as a brand, not one model alone) was very successful?
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Jared 5:25PM (6/26/2009)
They won't be around for long. Selling these two boat anchors was one of Mulally's best moves.
lanjackal 4:48PM (6/26/2009)
@Azure: Agreed. AFAIK no owner has managed to make these brand's profitable in well over a decade. It may just be time to put them out of their misery.
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British_Rover 4:54PM (6/26/2009)
Land Rover made Ford between 500 million and one billion dollars, hard to get an exact number since Ford never broke out numbers for individual PAG units and the currency conversion screws things up some too, in profit the last year Ford owned them.
It was widely reported in the British press and was even a feature story on Top Gear's website a year and a half ago.
Mr.Oak 6:54PM (6/26/2009)
Land Rover only made money after Ford gave them Jaguar engines. If LR had to develop engines on their own, they would have lost money again.
tenbosch 5:23PM (6/26/2009)
No offense to India (honestly), but there's a major perception issue with buying these cars now that their owned by an Indian company. The best thing that could have happened is if they were bought by a private investor, say in the UK. It would have returned the ownership back to the motherland. Could have done wonders for the 'brand'.
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Jared 5:27PM (6/26/2009)
Their problem isn't image; their problem is product. Land Rover and Jaguar have poor reliability, and lack the funding to properly design new platforms.
paul34 5:53PM (6/26/2009)
I disagree. The average LR or even Jag owners nowadays has no idea that the brands were even originally supposed to be British. In fact, they probably don't even know where England or India is, only when the next episode of Keeping up with the Kardashians comes on.
homunculus 6:34PM (6/26/2009)
Buying an 'authentic' british brand from an indian manufacturer is nothing new. you can only buy a new royal enfield made in india. this doesn't bother enthusiasts at all.
Mr.Oak 7:03PM (6/26/2009)
Tenbosch: Come on now, these companies sucked long before Tata arrived on the scene. Credit their lack of credibility to British engineering. Remember LUCAS the Prince of Darkness.
Sorry, just couldn't sit idly by and allow you to try and hang that albatross around the Indians' neck.
The best Jaguars in the world, all have Chevy engines in them.
carztech 7:41PM (6/26/2009)
"Their problem isn't image; their problem is product. Land Rover and Jaguar have poor reliability, and lack the funding to properly design new platforms."
Sorry Jared but reliability surveys are relative. Jaguar and Land Rover owners are more picky than Toyota and Chevy owners so JD Power rankings don't always tell the full story. The Jaguar XF just finished its initial first year of production. Whatever issues it had I am sure will be fixed pronto. Land Rover's reliability continues to improve every year.
Regarding "lack the funding to properly design new platforms". Tata Group is a huge huge huge huge conglomerate. Tata was already stamping body panels for Jaguar and Land Rover because they own the huge Corus Steel company and Tata's software group was already contracted to design systems for Jag/LR when under Ford ownership, these cost saving will further improve.
Mr. Ratan Tata who is well respected around the globe also sits on the board at Fiat and Alcoa. He has already stated that these British brands will remain in the UK.
johntmathew 10:30PM (6/28/2009)
Jaguar and Land Rover has a tradition of sucking....these two brands are going down and have been going down for a very long time. Almost took the entire Ford Motor Company with them. Now Tata is facing the reality.
Jared 8:49PM (6/26/2009)
carztech:
Land Rover and Jaguar buyers are no more picky than Mercedes and BMW buyers. Land Rover is consistently at the very bottom of every quality survey, year after year, and Jaguar isn't all that much better.
Tata had a lot of money. It's in very deep trouble now. Tata simply doesn't have the money to fund Jaguar enough to compete with BMW, Mercedes, and Audi.
the4thheat 8:13PM (6/27/2009)
carztech
Your argument makes no sense since lots of other luxury brands report a LOT less problems, including long term reliability. Lexus and Porsche are at the top of the charts and I'm pretty sure their owners aren't any less picky about problems.
carztech 8:59PM (6/27/2009)
But reliablility surveys don't just measure faults. They also measure trips to the dealer for software upgrades as well as non-substantial issues. Land Rover continues to improve and I have faith that they will match Jaguar near the top of reliability surveys soon.
I am also a big MINI Cooper fan. People can buy a Toyota Yaris or Honda Civic if they want but I will still choose a MINI Cooper over those any day. And the new MINI is ranked near the bottom of JD Power surveys too.
paul34 5:54PM (6/26/2009)
Well... can anyone honestly say they are surprised? This seemed like the inevitable outcome when the deal was going to go through, honestly.
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Polarstar 6:07PM (6/26/2009)
To echo Jared
Consumers aren't going to continue pending premium dollars on vehicles that at best have marginal reliability especially when they have other options.
Jaguar has been having issues for a while.
It's a shame for Land rover because they're vehicles used to be bulletproof.
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wilsonce01 6:42PM (6/26/2009)
Very true. I would love an LR3 (and the upcoming LR4) but the reliability is simply unacceptable. I can forgive an issue or two but every reliability rating I see on LR vehicles is dismal. Build a decent product and people will buy it.
ckm 9:20PM (6/26/2009)
Except that it's simply not true that Jags (can't speak of LR) have poor reliability. What they have is a perception problem, much like Audi had in the early 1990's after the 60 Minutes fiasco. The big problem that Jag has in particular is that it takes a lot of time to turn attitudes like yours around, no matter how good the quality.
And the fact is that the quality is very, very good, better than Audi and close to Honda for 2008 (http://www.carforums.net/showthread.php?t=66316) and just below Mercedes & above Toyota in 2007 (http://www.autoblog.com/photos/jd-power-and-associates-2007-initial-quality-study/266375/).
As long as everyone keeps repeating that Jag quality sucks, even if the data proves this is wrong, they will never sell any cars. But if I had $80k right now to spend on a car, both the XF-R and the XK would be on my very short list.
Chris.
carztech 9:56PM (6/26/2009)
Oh gosh, this whole discussion is going to be all over the place regarding good reliability and bad reliability. I have heard horror stories from BMW, Mercedes and Audi owners too. I guess we all take our chances when buying a new car, which will hopefully be taken care of under warranty. Heck, some Toyota V6 engines were having oil sludge issues for a while. However, this isn't shown in reliability surveys because they make so many vehicles that those product numbers offset faults in some of there other vehicles I would assume.
If you plan on keeping your vehicle for a long time then get a 100,000 warranty. As far as trips to the dealer, the new 5.0L Jag/LR V8 only needs to be serviced every 15,000 miles. So Lexus owners will probably be visiting their dealer more often then a new Jaguar or Land Rover owner would.
Reliability is important and I think all manufacturers want to improve.