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Tata to Announce Jaguar Purchase March 25, 2008

Posted by Michael in Economics.
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Many will bemoan this story as evidence of the further decline of the American auto industry.

I think it’s good news. One of the great engines of global prosperity is the free flow of capital across borders. So, this story warms my heart:

Car giant Ford is to sell its luxury UK-based car marques Jaguar and Land Rover to Indian company Tata.
Tata, Indias biggest vehicle maker, is likely to pay about $2bn £1bn in the deal, although analysts will be keen to see the exact price and terms.
The lengthy sale process started last June when Ford announced its intention to sell the companies as a package.
Jaguar and Land Rover employ about 16,000 staff at plants across the West Midlands and Merseyside.

The deal makes sense to me. Ford has enough problems attempting to resurrect the company. It is losing money on its acquisition of Jaguar and needs to cut its losses. According to the article, Land Rover is profitable. However, it’s also somewhat redundant with Ford’s own highly successful SUVs. Tata, which specializes in cheap vehicles, adds some class and cachet to it’s portfolio. For Tata, owning prestige English brands will, I suppose, be especially helpful to the company in its home market, given India’s colonial heritage.

Free markets. They work in the long run.

BBC NEWS | Business | Tata to announce Jaguar purchase

Comments»

1. steveegg - March 25, 2008

You have seen the Tata Nano, haven’t you? Not exactly in the same league as Jaguar or Land Rover.

2. Michael - March 25, 2008

Yes, I have. Well, not a real one, just a picture. It’s supposedly the cheapest car on the planet.

3. Muslihoon - March 25, 2008

Plus, you’ll be justified in saying “tata” with impunity.

We talked about Tata a few weeks back in class. All the guys were giggling and snickering throughout the presentation.

4. Michael - March 25, 2008

That’s what I was thinking, Musli. You can’t dislike a company named after something we all love.

If Ford would rename the Explorer to something like, say, the Boobmobile, I’d buy another one.

5. Mrs. Peel - March 25, 2008

It is losing money on it’s acquisition of Jaguar

*takes screenshot*

*is reminded that the advantage of her low-traffic blog is that no one sees her typos*

*still doesn’t feel like a hypocrite for taunting Michael*

6. Michael - March 25, 2008

Huh? What are you talking about?

7. steveegg - March 25, 2008

If Ford would rename the Explorer to something like, say, the Boobmobile, I’d buy another one.

It would have to be something positive, like “Tits”.

8. Tushar D - March 25, 2008

Michael,
LR/Jaguar being British won’t mean a thing in India. But Land Rover is a known name in India.
Tatas are not buying LR/Jag for the Indian market. They are going to combine the brand names and engineering of LR/Jag with their own low-cost manufacturing prowess to come out with a big high-low mix of products.
I interned at a Tata truck assembly line while doing my BS in engineering. Still remember how to assemble a light truck diesel engine. Wow…15 years….


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