Tata faces economic patriotism from Jaguar dealers, hoteliers

by Patrice Sarath, December 19th, 2007, 6:41 am

Do you know what they say about buying a Jaguar? That when you buy one you better also get the little trailer that comes with, so you can bring your mechanic with you everywhere!

OK, enough Jaguar-bashing. Although American Jaguar dealers have expressed concerns about brand dilution if the luxury car maker is bought by Indian conglomerate Tata, I refuse to sink to their level. (Yes, technically, I just did, by leading off with aspersions on Jaguar’s quality. Hey, everyone has her breaking point.)

But seriously. Just because Tata makes the world’s cheapest car, which costs about $2,500, doesn’t mean it can’t also successfully manage the luxury Jaguar and Land Rover brands. After all, it’s not like Ford didn’t find itself in over its head. The US dealers say they prefer the offer by One Equity, a private equity firm advised by former Ford head Jacques Nasser. Is this a case of “better the devil you know than the devil you don’t?”

Adding insult to insult, Tata took it on the chin again when luxury hotelier Orient-Express rebuffed its offer of taking equity stakes in each other’s companies. Tata runs a luxury hotel chain itself. Orient-Express’s CEO Paul White said, “any association of our luxury brands and properties with your brands and properties would result in a reduction of our brands and of our business and would likely lead to erosion.”

Well. There has been a heated exchange of stiff notes and whatnot between the firms. I am sure Tata will take the high road — and then buy Orient-Express at a discount when the once proud hotel chain falls on hard times. Oh, we’ll see who is sneering then, Mr. Paul White!

(Sorry, got a little overwrought there.)

The good news is that the unions and some European auto dealers have endorsed the Tata bid. So that’s something. Tata remains the frontrunner, but we all know how that works — in mergers and acquisitions as well as in politics, there’s always a dark horse waiting in the wings. Just ask Barclays. Or better yet, don’t. They might still be a little sensitive about it.