Friday, June 6, 2008

India’s newest force-Take 2

Editor's Note:
Apparently there was some “Technical Difficulties” with some of the stories recently posted on No Fenders via a remote location, while your humble scribe was out ‘N aboot in the wilds “O Eastern, WA. Sorry for the unknown Gremlins… As we’ll soon return to our Normal Programming at No Fenders...

Thanks for your patience,

BY now you’ve probably heard the news that India’s Tata Motors Ltd has finalized its deal to acquire the luxury British car brands of Jaguar and Land Rover from the beleaguered ford Motor Company for $2.3 billion.

Tata Motors Ltd is India’s largest national automotive producer and currently enjoys a market share of 65% of all vehicles sold. The cash rich Automobile manufacturer, with current reserves of $29 billion, secured a $3 billion bridge loan from Citigroup and JP Morgan Chase in order to acquire the remaining British marcques of Ford’s Premiere group, which once housed the Jaguar Formula 1 team and PI Research group run previously by Bobby Rahal and Niki Lauda.

But just who is Tata Motors? The company is just one of the Tata Group’s multiple holdings as the family controlled business also owns the Corus Group, a Dutch steel giant, currently the sixth largest in the world, the Tetley Tea company as well as a portfolio of American luxury hotels including the Pierre in New York city.

Originally known as the TELCO (TATA Engineering and Locomotive Company), they first began producing locomotives in 1945. Tata Motors then made their very first foray into commercial vehicle production in 1954 in a joint venture with Dalmer Benz, with production of a heavily copied truck model, with the arrangement lasting thru 1969.

Since India’s infrastructure wasn’t set up to accommodate heavy tonnage vehicles at this time, Tata set it’s sights on the Light Commercial Vehicles (LCV) market segment instead, producing it’s very first in-house designed LCV vehicle in 1986, the Tata 407.

Tata then set about expansion at a moderate rate by participating in joint ventures and in 1993 formed an alliance with Cummins Engines for the use of high horsepower modern diesel engines. A further joint venture was taken with Tata Holset UK in order to produce turbochargers for its Cummins engines.

In 2000, the company introduced Compressed Natural Gas (CNG) busses as well as launching it’s 1109 Medium Heavy Commercial Vehicle (MHCV) truck, designed to fill the gap in it’s vehicle line-up with this intermediate tonnage truck, along with other new vehicles.

After enjoying a long dominance of the commercial vehicle market, Tata launched its first passenger vehicle, the India. Although this design received less than positive press remarks, nevertheless it’s good fuel mileage, peppy engine and mass marketing made it an eventual sales success, with large quantities being exported to South Africa along with a Rover badged version being sold in the UK. This was the City Rover, a joint venture with MG Rover which lasted briefly as the company went bankrupt before being sold to China.

With the huge success of the various India models, Tata set its sights towards Global expansion and in 2004, Tata purchase the Daewoo commercial vehicles company of South Korea. The acquisition of Daewoo Trucks allows the company to lessen its dependency upon the domestic market sales with production of such vehicles as the Tata Novice, a well selling Heavy tonnage vehicle (TDCV) in South Korea.

Continuing it’s International expansion, Tata next set it’s sights upon the Bus market, purchasing a 21% stake in Hispano Carrocera SA in 2005, selling it’s products in the Spanish domestic market, along with establishing a 51/49% joint venture with Marcopolo S.A, a Brazilian company that is a Global leader in bus body production.

Last year Tata produced approximately 600,000 vehicles and Ratan Tata, the 70yr old Chairman of the Tata Group claims the acquisition of Jaguar and Land Rover is seen as a way to diversify itself against the upcoming stiff competition from ambitious Chinese auto makers.

Interestingly Daimler Benz currently holds a 7% stake in Tata Motors, while Tata also has a partnership arrangement with the recently shed Chrysler Motor Company, whose Global Motorcars division currently sells Electric versions of Tata’s popular Ace vehicle, while Tata Motors will also begin production of the controversial Nano later this year, being the world’s lowest priced vehicle ever produced, with a $2,500.00 retail price tag. Tata also has an interesting compressed air hybrid vehicle called the One Cat it’s currently working on.

Meanwhile the Indian Auto giant has also been aggressively unveiling multiple concept vehicles for joint partnership development in multiple Nations and is set to begin mass production in Thailand and Argentina, along with forming an alliance with FIAT to gain access to its diesel technology. With FIAT’s assistance, Tata is aiming to produce its Global pick-up for sales in such countries as Europe along with its debut in the United States slated for 2009.

Prior to Ford selling off Jaguar and Land Rover this March, Tata was listed as the World’s twentieth largest vehicle manufacturer, while Ford’s sale of it’s luxury British marcques also includes the Daimler , Rover and Lanchester nameplates, much to the chagrin of Chinese manufacturers.

Yet this sale is somewhat curious, as this now leaves Ford only with the Volvo nameplate in its stable of foreign Automobile manufacturers. Ironically Volvo’s truck unit currently competes against Tata for sales in India, with Volvo being the “Mercedes Benz” of trucks currently occupying the country’s roads as these two rival companies competes for vehicle purchases in the Tractor Trailer segment, as India’s road infrastructure has been vastly improved by their National Highway Act.

While Vijay Malia was spotted smiling in the Barcelona paddock on Friday over his recent acquisition’s surge to the top of the timesheets,as the Spyker F1 driver’s briefly led all contestants before uncharacteristically settling for top ten runs. Couple This improved performance along with the impending Indian Grand Prix slated for 2010 and hence, Tata could be enticed into purchasing the rival Scuderia Toro Rosso Formula 1 team in order to begin its own racing program?

While Toro Rosso’s Ferrari customer engines would give some prestige, why couldn’t Tata revive the stillborn Cosworth V-8 engine program with a little badge engineering to give Tata the global marketing glamour it so desires. Could we once again see the revival of Jaguar in F1?

Of course Tata would need to be careful to avoid the overambitious goals of Spyker Automobiles failed foray into Formula 1, which ultimately led to the team’s being sold to India tycoon Vijay Malia. Yet, such a audacious move could see Malia forced into playing second fiddle in India’s burgeoning Automobile market…