Ford never could figure out how to make money on Jaguar and Land Rover, and now Tata Motors is struggling with the very same problem, albeit in a much tougher economy. The Wall Street Journal reports that the company posted a net loss of $67 million (3.29 billion rupees) for the fiscal quarter ending June 30. In the same quarter last year, Tata recorded a net profit of $147 million (7.2 billion rupees).
With the addition of the Jaguar/Land Rover model lines, Tata's net sales were actually up 13 percent year over year, says the WSJ -- yes, even though Jaguar-Land Rover unit sales were way down in the U.S. and Europe. But this wasn't enough to offset the added expense of owning these two brands.
So now there's just a little more on the line with the make-or-break launch of the redesigned 2010 Jaguar XJ, which goes into production this fall.
According to a report in Automotive News, Tata hopes to sell the ultra cheap Nano in the U.S. by 2012.
Speaking to a panel at the Cornell Global Forum on Sustainable Global Enterprise, Chairman Rattan Tata said he expects to meet all U.S. crash and emissions standards with the Nano within two years.
Mr. Tata is a man of vast resources, but getting a Nano to pass U.S. vehicle requirements is going to be a monumental task. A version is planned for Europe in 2011 is expected to cost around $2,300, a U.S. version would probably be slightly more.
After a public debut on March 23 in Mumbai, the Nano officially went on sale from April 9-25. For a fee of around $6, customers could apply to purchase a Nano at more than 30,000 locations in 1,000 cities across India. Orders could also be submitted online.
The response to this unusual booking process appears to be overwhelming, so much so that Debasis Ray, Tata Motors' head of corporate communications, told Inside Line the results are still being calculated days after the order books were officially closed. Several Indian media outlets have reported that Nano bookings could reach 1 million, though Ray said he had "no idea" where these publications were getting that figure.
A funny thing happens when testing the Tata Nano, now the world's cheapest car since it was unveiled in production form in Mumbai, India, on Monday. Instead of the most powerful and expensive models getting all the attention, it's the least expensive, base Tata Nano that attracts all the onlookers.
This is the famous "1-lakh" (100,000 Indian rupee) model that Ratan Tata, chairman of the Tata Group, promised he'd bring to market. Inside Line has been on scene in India this week, covering the launch of the Tata Nano as the tiny Indian-built city car (with a base price starting at only $2,000) is introduced to the world.
During its big debut in Mumbai yesterday, Tata chairman Ratan Tata told reporters that although the Nano doesn't currently have anti-lock brakes, airbags or significant bumpers of any kind, it could meet U.S. safety and emissions standards within a few years.
With a price equivalent to $2,000, the Nano would undercut the current cheapest car on the market by at least $7,000. Of course, upfitting Nanos to U.S. standards will probably double the price. Would anybody care at $4,000?
Following last week's announcement that the Tata Nano would finally go on sale in India on March 23
, the Financial Times
is reporting today that Tata Motors has confirmed the European-spec Nano
will go on sale in Europe in 2011.
Tata Motors offered no pricing details on the car, which will be called the Nano Europa. Still, it goes without saying that the modifications required to get it up to European crash and emissions standards will push it past the Euro equivalent of $2,500.
We would wager, too, that plenty of comfort features will be added given the Nano Europa's different market positioning: Whereas the India-spec Nano is an alternative to commuting by moped or bicycle, minicars are everywhere in Europe and buyers aren't necessarily going to be impressed by absolute bare-bones transportation -- they've got choices.
Tata also announced that it would begin selling an electric version of the Indica Vista in Europe in 2012. It will have lithium-ion batteries and a range of about 124 miles.
As good as the XFR looks and sounds going that fast, a separate report from the Financial Times tempers that feeling slightly. Jaguar Land Rover, subsidiary of Tata Motors, announced it will cut 450 salaried employees from its UK workforce.
It looks like the Land Rover/Jaguar acquisition is going to cost Tata a pretty penny; make that $100 billion pennies (or $1 billion dollars). That's what the latest reports are suggesting--and that's after buying the two brands for $2.3 billion.
The spreading Wall Street financial crisis is beginning to affect what we will see offered here and around the world--and sooner rather than later. No market is going to get by untouched. Even those OPEC and other oil-rich countries will see some sort of negative effect as it pertains to vehicle choices. AutoObserver has an excellent article on how automakers are addressing this situation:
This is interesting if for no other reason that Chrysler's CEO, Bob Nardelli, has confirmed that there have been discussions with other parties "interested in exploring future possibilities." He added that no final decision has been made one way or the other. It's unusual that such a comment would be made on a topic like this. I guess, with all the news on this possible merger over the last few days, Nardelli felt something needed to be said.
AutoObserver is reporting that Chrysler LLC is talking to both Tata and Fiat. Early indications suggest that "parnerships" are being discussed. Items being rumored are that Tata may help build and sell Jeeps; and that Fiat (and Alfa Romeo) are looking for a way to get back in the American market, and Chrysler may be of assistance here.
That does not, however, mean that other subjects are not also on the table, as in Cerberus looking for a way to get out of this Chrysler mess. As you might expect, nobody is talking, which of course helps feed the wild speculation.
Now that the Land Rover/Jaguar sale to Tata is complete, might Ford be considering selling Volvo?
Ford has long denied that Volvo would be sold, however, Just-Auto.com
is now reporting that just such a sale may indeed be in the works; if not in the works, at least is being comtemplated. If it happens, it would be much more difficult considering so that many Ford products are tied to Volvo platforms and vice-versa.
When Tata makes headlines, they do it in bunches. Not content to having just completed the Land Rover-Jaguar deal, or having developed a $2500 car, they have now set their sights on winning the X-Prize.
For those who need some reminding, the X-Prize will be awarding a $10-million prize to the company that can build a production-capable 100 MPGe (Miles per Gallon equivalent) vehicle that meet market needs for price, size, capability, safety and performance. To date, more than 70 teams from 12 countries have already signed a letter of intent to compete for a share of the purse...
It's a done deal. Tata now owns Jaguar and Land Rover, as official word of the sale was just announced. The deal nets Ford, the former owner, $1.7-billion, which is roughly one third of what they paid for the two luxury brands.
"This is a momentous time for all of us at Tata Motors," Tata Chairman Ratan N...
AutoObserver is reporting that Chrysler LLC is talking to both Tata and Fiat. Early indications suggest that "parnerships" are being discussed. Items being rumored are that Tata may help build and sell Jeeps; and that Fiat (and Alfa Romeo) are looking for a way to get back in the American market, and Chrysler may be of assistance here.
