East is east and west is west, and never the twain shall meet. — Rudyard Kipling
It will give us more of a global presence. It is to give us scale and global reach as we take ourselves away from subordination to a single economy. — Tata Chairman Ratan Tata
Tata’s interest in buying nameplates Jaguar and Land Rover from Ford has certainly put a smile on my face (although I promise not to burst into song again). As I’ve written before, Tata is one of my favorite companies. It’s eclectic, humanistic, and profitable; it has a colorful and controversial history (even if that history put it on the wrong side of the Opium Wars — boo!); and it is the poster child for where I think the world of business is heading: East.
Tata showed its audacity when it acquired Corus Steel, and there’s no reason it can’t take these struggling luxury car brands off Ford’s books as well. Jaguar and Land Rover were never really a good fit for that most plebeian of car companies. Even Ford’s top sportscar nameplate is the quintessential American animal, the Mustang — would Steve McQueen drive a Jaguar in Bullitt? I don’t think so.
With its British Raj past, Tata will be a much better owner of these British brands. Tata has automotive operations itself, and these luxury brands will fill the space at the top of its product line, which primarily consists of buses, trucks, SUVs, and low-end cars. Although the company’s goal is to move into the European market with this acquisition, I think that’s a rotten idea (it didn’t really work out for Ford either). Instead, it should be focusing on the opportunities at home. As India’s economy — and its middle class — grow, so will the demand for high-end vehicles.
While the deal is far from done (Indian competitor Mahindra & Mahindra is also rumored to be interested, and it already has a relationship with Ford) it shows how fast business has moved in India.
To Westerners trying to troubleshoot their computers or upgrade their phone service the country might still be synonymous with outsourcing and help desks, but the times have changed. Opportunity is moving both ways now. I expect to see a lot more deals like this one coming out of India over the next few years.
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