MANAGEMENT PLAN OF JAGUAR AND LAND ROVER FOR TATA MOTORS

Tata Motors Limited, India’s largest automobile company and leader in

commercial vehicles is also the second largest in the passenger vehicles market. We are the

world’s fifth largest in the medium and heavy commercial vehicle segment and the world’s

second largest medium and heavy bus manufacturer.

Our company's 22,000 employees are guided by the vision to be the "best in the

manner in which we operate, best in the products we deliver and best in our value system and

ethics."1

Starting from 1859, when we were established, we have had a rich culture and

heritage. We have always been a company that was driven by its values. The age-old values

we have been following are Integrity, Understanding, Excellence, Unity and Responsibility.2

Our main policy in recent times have our drive to go global with our aggressive inorganic

route to growth. Our major acquisitions in the recent two years have been Daewoo

commercial vehicles in South Korea, Hispano Carrocera in Spain, Tata Finance and Incat

International in UK. We want to acquire something that gives us new technology, new

markets, new products, new customer bases or an idea to develop a new product and only if

the deal is financially sensible.

We acquired Jaguar and Land Rover from Ford for $2 billion. It has been

profitable for us because when Ford acquired Jaguar it was for $2.5 billion way back in 1989.

Now we have got it in a cheaper price. Since we have both Jaguar and Land Rover in our

hands now, we are going to get the best out of it.

We have actually chalked out a business plan for maintaining both Jaguar and

Rover. Our marketing strategy for Jaguar and Rover would concentrate more on the target

market. Currently our research team has found out that the target market for Jaguar has

always been the niche class of people and mostly the people above the age of sixty bought it.

This is fine as far it keeps up the brand image of the car. But with a growing population of a

the younger people we have to come out with some trendy models of Jaguar. If we look at

demographics, Jaguar and Rover concentrated mostly on the European and the North

American segment of the world. It had tough competition with the likes of BMW, Mercedes,

Porsche and Ferrari. So Jaguar was not able to capture the market there. It is not only US or

Europe where we get rich people. If we see minutely there are more emerging billionaires in

the Asian countries than there. Countries in the middle-east consist of a high class of people.

If we can brand our models here it will be more profitable. Also looking from the economic

point of view, we know these brands are costly. We are not going to bring down the price. It

is still going to target the rich. We would target the business class which comprises of people

from the age group of 30 to 50 years.

That was for Jaguar. For Rover we have planned for a new target market in

addition to the previous. We are planning to introduce Rover in India. This would be a totally

customised Rover model particularly designed for Indian roads.

Now from the production aspect we have seen that most of the production units of

Jaguar and Land Rover are in Britain and the best strategy would be to retain those

production units there. This would cancel the cost of building a new plant. This would also

save quite some jobs in Britain which would not make them unhappy. If necessary then cheap

labour from India will be transferred. Since Jaguar and Land Rover together employ 15,000

people in Britain, we are going to retain all three of these UK factories at Solihull, Castle

Bromwich in the Midlands and Halewood on Merseyside. Anyways Ford is still continuing

to supply the material for the production of Jaguar.

Besides these there are other Jaguar and Rover plants in South-East Asia, Japan

and Argentina. We continue production in these countries too. Increased production in these

countries would benefit us more because of low productivity tax there. Then these cars can be

exported to the European market and the US market to increase the export revenue and hence

more profit. This would help us solve the problems in the European market which is having

Euro as their currency. This helps in imposing high tax which increase production cost.

Another problem is that European countries have their own trade union. So the production

unit in Britain will be able to cut down costs on labour and wages.

Since Jaguar has mainly targeted the niche class of people so long we will

continue the same strategy. The main target would be the increasing profit. Once this has

been achieved, the next step would be to open a production plant in India which would bring

new jobs to the country. We have cheap labour and the increased productivity and export

earnings would add to the GDP of the country. This would require a huge investment that

will be met by the profit from the sales of these two brands. The only short term investment is

on production of these cars now. But once the sales gears up, we can plan for long term

investments. We have seen the growing market of SUVs in India. This brings forth the idea

of producing new models of Land Rover customized to the Indian road conditions.

We are planning to come out with independent production hubs that will focus on

making different vehicles at different locations, instead of the earlier integrated facility where

it had the commercial vehicle and passenger vehicle production lines in the same unit. Newer

models of Land Rovers suitable for Indian roads will be manufactured. This would definitely

increase the sales of Land Rover because we Indians always desire to drive a foreign SUV

and when our own company produces it would be a definite hit. Our design team is already

working with the compatible models with Indian roads.

Jaguar was already planning to expand its model range with at least three new

models after its sell-off by Ford to Tata. Executives and engineers are coming up with a new

GB40000 two-seat sports car, a two door coupe version of the XF saloon and four-door

version of the XF luxury coupe. None of these three models are officially signed but the plans

have been presented to Tata Motors’ management and this will be our key new programme.

We are actually researching on the energy sources for these two models. Both

Jaguar and Land Rover runs on petrol and diesel. But looking at the availability of these

resources we have decided to implement something new in these brands. This might retain

our customers for a longer period of time. Our research team is working on the

implementation of electricity in these cars. Land Rover being an off-road vehicle cannot be

run on electricity because of the immense consumption of power. But Jaguar cars can be run

on electric charge. Our main idea is to charge the engine of Jaguar. For this we are planning

to have charge stations like the normal gas stations. If we can charge the engine of the car in a

very short time and calculate the mileage it would give we can actually give new life to the

world by making a pollution free atmosphere. Yes, there is a huge investment in it if things

work out. The production of electricity and setting up charge stations would be a matter of

concern. This is still in the R&D phase.

Jaguar and Land Rover were expensive and ranged approximately above $30,000

to around $100,000. We are planning to reduce the price by around $5,000 to attract

customers. This would help us to gear up the sales and increase the profit margin.

Talking about investments we have already incurred a huge expense of $2 billion

acquiring Jaguar and Land Rover. We have decided to continue with the production in the

previous production units of Jaguar and Land Rover. There is not going to any more

investments in plants. The focus would be on the marketing aspect of it. Since Jaguar and

Land Rover lost its sales for inadequate marketing, we will focus on it. Investments would be

on advertising and hiring new brand ambassadors for the international market. We already

have some of the eminent personalities from India as our brand ambassadors for Tata Motors.

We are on talks with someone from Europe and the Hollywood for branding our cars for the

international segment which is our recent target market.

We are also investing on the R&D as we are planning to come out with an

alternative energy source. But this is a long-term investment. For the time being we do not

expect much return on the investments. The main motive is to bring a breakeven in the sales

and come out of the losses these companies have incurred. It was only Land Rover that could

keep its sales intact. So we are not anticipating any profit margin in this year. But for the next

two years we expect the profit margin to increase. Ford will continue supplying the raw

material for manufacturing Jaguar. For raising the operational cost of the company fresh

stocks are going to be released in recent times.

Our short and long term goals are clear now. Now the most important is who are

going to be the part of this new venture. Since we are going global, we are planning to keep

some of the officials of Jaguar and Land Rover who were working with Ford. Our

management style has always been to retain the best. The previous officials are well

accustomed with the business process going on there and it would be easier for us to deal

with the complicacies that may arise. This would also actually give us time to train our own

people to work in a global environment.

Since our target market is now more focussed on the younger people it would ask

for new trendy designs. For this we need fresh talents with new innovative ideas. We have

designers in India who are internationally acclaimed. Hiring them is also a good option. Also

automobile engineers and designers from across the world can be hired. Since our major

plants are in Britain, Japan, Argentina and South-East Asia we will hire fresh talents from

these places. This would also create a well being with the people of those countries. This

would cost more because labour is not cheap everywhere but for the betterment of the

company and to gain long term returns it is necessary. Giving employment to the local people

would help us address the issues of unionization. The key ideas for motivating our workforce

would be to spread the vision of Tata that has been followed since the time the company is.

Moreover it is necessary to make them understand that if Tata is able to come out with the

cheapest car in the world using its own engineering which many big companies have not been

able to do then managing Jaguar and Rover should not be difficult.

Tata Motors has an age old tradition to be engaged in community welfare take

social initiatives on labour and environment standards in compliance with the principles of

the Global Compact. They play a major role in serving rural communities. This makes the

population of India so much loyal to this company. We are going to follow maintain our same

attitude towards the welfare of the country and the world as a whole. We are going to provide

free education for the children of the labours working in Tata Motors both national and in the

global space. Social awareness programs are also one of our key activities.

To end with I would like to say that Jaguar and Land Rover has not fallen into the

wrong hands. We at Tata are going to remould the future of these two international luxury

brands. Our investment plans, new designs with a scope for alternate energy usage, our new

target markets and retaining the best both production units and talents, hiring fresh talents

from around the world is definitely going to make us a global company. All our teams

(marketing, production, design, finance and HR) have come together for this new venture and

we keep our fingers crossed for a new revelation. We made the Nano. Now we have Jaguar

and Land Rover!

Credits:

1- http://www.tatamotors.com/our_world/profile.php

2- http://www.tata.com/0_about_us/values_purpose.htm