Moves like Jaguar

Award-winning motoring writer Ray Hutton has for over 35 years contributed to several global publications including the UK’s Sunday Times , Motor Trader , Car and Driver and Overdrive . The former editor-in-chief of Autocar magazine is also the honorary President of the International Car of the Year jury and vice-president of the UK Guild of Motoring Writers. His latest book, Jewels in the Crown , explores how the Tatas brought about a remarkable change in the fortunes of British icons Jaguar and Land Rover.

What inspired you to write this book?

I wanted to do this book because I thought that the Tata takeover of JLR was truly interesting and an inspiring business story. I thought I was well-placed to write it because I’ve been following the fortunes (and misfortunes) of the Jaguar and Land Rover since the 1970s and Tata Motors since the 1990s, and had a lot of material that had not been published in detail. Also, JLR is a rare success story in the 21st century UK automotive industry. The fifth anniversary of the acquisition, after three years of remarkable growth — and Ratan Tata’s retirement — seemed a good time for this publication.

What was your initial reaction when Tata took over JLR?

That of many other commentators in Europe and the US: if Ford, the second-largest car company in the world, can’t make a success of JLR and wants to dispose of it, how is an Indian company that makes trucks and small cars going to handle it? I also thought that Land Rover was the prize (which, of course, it was) and that Tata Motors would seek to share LR technology with its own products (which they haven’t — yet). But I was better informed than many because I had some first-hand experience of Tata and knew something of the size and depth of the group’s business — and was, of course, aware of the successful takeover of Corus/ British Steel.

During your journalistic career have you encountered revivals such as JLR’s... where a management style of healthy non-interference has worked so effectively?

Consolidation in the motor business has more failures than successes. Volkswagen has achieved remarkable turnarounds at Audi, Skoda and Bentley, and Nissan has thrived again in its alliance with Renault, but these are all rather different from JLR as they use common components and systems to reduce costs and improve efficiency. Fiat may do the same with Chrysler. These involved the new parent company assuming the management of that taken over. Tata left JLR management alone initially, mainly because it had no one who could do a better job; but I would suggest that the real progress has come since it introduced new top managers, trained by other premium car companies — mostly Germans from BMW!

What do you think JLR could have done differently during the last five years?

Tata hasn’t done much wrong, and when it has made mistakes with a few senior appointments it has been quick and decisive in making changes. It may still regret not closing one of JLR’s three factories — as planned by Ford and recommended by outside experts. The next few years will be more challenging: so far, all the cars launched were initiated by Ford; and from now on, JLR is on its own, having to develop new platforms and engines. It is late setting up manufacturing in China and that market cannot continue to boom the way it has in recent years. The Saudi Arabian project is risky politically. And with the amount of investment it is committed to, profits can’t continue to grow at the rate of the last three years.

Do you think there are bigger challenges ahead for JLR with newer emission regulations and the need for developing smaller vehicles?

JLR knows it must have more smaller vehicles to cope with future emission regulations, but will still need to have a separate agreement for emissions reduction with the EU as the range will not be wide enough to meet the required fleet average. Porsche, in the same situation, can now be included in the Volkswagen Group figures. The problem is the price-volume ratio: Can a small Jaguar, made in aluminium, sell enough, at a high enough price, to make a decent return?

The other thing to consider is the future relationship with Tata Motors. You will know better than me whether it is poised to climb out of its current trough but it can’t be healthy for its wholly-owned British subsidiary to be its only substantial profit-maker. And while it is clear that Ratan Tata took a personal interest in the JLR acquisition and has been the driving force, will Cyrus Mistry continue the same policies?

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