New Delhi: Industrialist, philanthropist and a beloved national leader Ratan Tata died late Wednesday night at the age of 86. A colossus in the Indian and global business world, he left behind a grieving nation and a treasure trove of lessons, including the story of how he bought Jaguar and Land Rover.
In March 2008, the automotive world turned its attention to India.
As a new day dawned in the United Kingdom and the US, newspapers headlined the news of the Tata Group’s purchase of Ford-owned British brands Jaguar and Land Rover for $2.3 billion, outbidding compatriot Mahindra & Mahindra.
This was the Indian automotive industry’s ‘Neil Armstrong moment’ – ‘one small step for Tata, one giant leap for the country’s corporate brand’. It was also a moment of personal triumph for Ratan Tata, after the US brand turned him down when he tried to sell a production unit.
The story begins with the launch of the Tata Indica in 1998.
India’s first diesel-powered hatchback, the Indica was also widely seen as the country’s first indigenously designed and manufactured car. It was also a car close to Mr Tata’s heart.
However, sales were poor and a frustrated Ratan Tata flew to the US to cut his losses and offered the factory to then Ford boss Bill Ford. The meeting did not go as planned.
Mr Ford reportedly rebuked Mr Tata, saying the Indian company should never have started manufacturing cars and said buying the plant would be a ‘favour’ to Tata.
A “humiliated” Ratan Tata withdrew his offer to Ford and returned home with renewed focus and determination, and his goal was very clear – to prove his doubters and critics wrong.
Nine years later – after making the Indica a success, European and African exports by 2004 and domestic sales reaching 1.42 lakh in 2007 – Mr Tata did just that.
By 2008 Ford was struggling.
The recession in the US economy took its toll and the company nearly went bankrupt; in fact, it might have done so if not for a government loan.
Ever cautious, Ratan Tata moved quickly to buy Jaguar and Land Rover, forcing Ford (the report claims) to admit that the Indian company was doing it a ‘favour’.
For Mr Tata, there may have been an element of revenge in the deal, but it was also good business.
Jaguar, even though struggling at the time, is one of the world’s most exclusive and best-recognised sports and luxury carmakers, and Land Rover had posted record sales in the previous three years.
This included earnings of $1 billion in 2007/08.
“There is no reason to tinker with brands… our challenge is to take them forward,” Mr Tata said at the Geneva Motor Show in Switzerland a few days after the deal was announced.
And they did. Sales of JLR, or Jaguar Land Rover, rose from £9,871 million in 2011 to over £25,000 million by 2018. For FY24, the company said it sold more than four lakh vehicles.
The whole episode showed the world what hard work, determination and resilience can bring, industrialist Vedanta Birla posted on X in June 2022, the 14th anniversary of that historic moment.
“Tata entered the global motor industry from there and has since become a world-class player…”
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