Not too long ago, they were ailing. But five years after the Tatas took them over, Jaguar and Land Rover are speeding along. The sudden momentum could be because Tata Motors has reposed greater confidence in the iconic brands than the brands themselves did. But the JLR combine still needs to ensure that it does not run out of steam.

At the ongoing Frankfurt Motor Show, when asked what had changed since the takeover — Tata Motors paid $2.3 billion or Rs 9,200 crore in 2008 to buy Jaguar and Land Rover from Ford — JLR executives offered a standard response: : “Nothing much, we are a separate company…”

But when it was pointed out that not many believed Tata Motors could turn the ailing British brands around, an executive responded saying that the media was “cynical” when it passed this judgement.

Not cynical, just sceptical, he was reminded, given that Tata Motors was largely a truck maker, and had gotten into making cars just a little over a decade ago.

Ratan effect

It was another executive, during informal discussions at the Motor Show, who put things in perspective. He pointed out that Jaguar was part of Ford while Land Rover was with BMW (the German carmaker sold it to Ford in 2000). Under Ford and BMW, the two brands were a small part of large companies, which took all the decisions.

Even now, JLR is a small part of a conglomerate called the Tatas, the executive points out. But, the difference was a talk then Tata Group Chairman Ratan Tata had with JLR executives.

Tata, says this executive, made it clear that he had decided to acquire JLR mainly because of the heritage and iconic status both enjoyed. It was up to the executives to restore the icons to their original status, he told them.

Now, says the JLR executive, the company is responsible for all its decisions and can no longer pass the blame onto someone else. This is the single biggest change.

JLR reported sales of 252,036 cars in 2012, a more than 40 per cent increase since 2008, when the Tatas took it over. Indeed, Tata Motors was able to report a Rs 703 crore profit after tax in the first quarter of this financial year only because JLR paid a £150 million (Rs 1,420 crore) dividend to its parent in June.

Expansion is now on the anvil. JLR has announced a new plant in China and is also looking to set up plants in Saudi Arabia and Brazil in future. The carmaker has announced huge investments on a new engine manufacturing plant, which is expected to reduce its dependence on Ford for engines, as well as new products and platforms.

New direction

At the Frankfurt Motor Show, JLR made two other significant announcements. One, that it is going in for a lightweight aluminium architecture on which all Jaguar cars will be built in future. Two, a concept of a sports crossover from Jaguar. The first vehicle on the new architecture will hit the market in 2015.

JLR’s competitors – BMW, Audi and Mercedes-Benz – may not be too worried as the gap between JLR and the three German companies is huge. Both BMW and Mercedes-Benz have launched entry-level luxury cars and all the three German makers are already in the SUV segment.

But, for JLR, almost written off a few years back, this is a momentous step, one that it is taking with more confidence than it probably did in the last decade and a half.

Long haul

During a press conference at the Motor Show, John Edwards, Global Brand Director, Land Rover, said that over the past three years, the business had been through a remarkable transformation.

The secret of the success, he said, was that JLR understood the SUV market better than anyone else. The company plans to continue focusing on three aspects: luxury, leisure and a combination of both.

But it still has a some way to go to catch up with the leaders. A comparison of the sales over the last five years, since Tata Motors bought JLR, will give an idea of the long haul ahead for the UK based carmaker. In 2008, JLR had sold 252,036 vehicles, which jumped 42 per cent to 357,773 in 2012.

During the same time, BMW’s sales increased 28 per cent to 1,540,085 cars; Mercedes-Benz’s went up 14 per cent to 1,451,600. And Audi’s jumped 45 per cent to 1,455,123 cars.

That the British carmaker is serious about expanding the business can be seen from the fact that an ex-BMW veteran, Ralf Speth, is now JLR’s CEO. He was appointed to that post in February 2010.

And Wolfgang Ziebart, who, over two decades, was part of BMW’s R&D and then automotive supplier Continental and German chip-maker Infineon, has been pulled out of retirement and appointed Group Engineering Director of JLR.

> ramakrishnan.n@thehindu.co.in

(The writer was in Frankfurt at the invitation of Jaguar Land Rover.)

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