Graeme Brown
Indian industrialist Ratan Tata has transformed the fortunes of Jaguar Land Rover since taking over the firm in 2008. He speaks to Graeme Brown about the future of the Midlands’ most important company.
It has become the UK’s go-to success story – a historic car-maker that has gone from losing hundreds of millions of pounds to a record £1.5bn profit – during a recession. But Ratan Tata, the chairman of Jaguar Land Rover’s parent company Tata Motors is warning against getting carried away with the financial success.
Mr Tata accepted there had been a marked turnaround at the company his firm took over in 2008, which lost almost £350m the next year, but said despite gargantuan profits of late the cyclical nature of the automotive sector meant the company dare not rest on its laurels. In an exclusive interview with the Birmingham Post, Mr Tata also revealed plans for a host of new models were progressing strongly, and cast doubt over whether electric cars were close to establishing themselves on the mass market.
The company is currently in the throes of setting up a production base in China, and has been linked with plants elsewhere, but Mr Tata said the West Midlands remained at the heart of plans, and there were more likely possibilities to increase capacity, such as additional shifts. Mr Tata, who is set to retire in December after more than 30 years as Tata Group chairman, said despite the latest results showing demand from China had pushed revenue past £13.5bn, and pre-tax profit to £1.5bn, the company had struggled before, and there was no certainty of success.
He said: ‘The company went down initially because of the downturn. All of us were thinking ‘why did we buy this white elephant? What a stupid thing to do! I am very proud of what the people of Jaguar and Land Rover have been able to do but there is a long way to go. It is a cyclic thing. We have moved on from where we were but the competition isn’t going to sit quietly – it is a dog-eat-dog world.’
‘We have a long way to go but I am hopeful that as a company we will bring these brands back to their previous glory.’
Jaguar Land Rover appears in rude health four years on from the £1.15bn takeover by Mumbai-based Tata at a time when its very survival was under threat. Billions of pounds have been invested in research and development, with a view to a new model family, and the knock-on effect has been felt by about 20,000 direct employees in the UK and thousands more in the automotive supply chain.
The Range Rover Evoque and the Jaguar XF have been vital to the revival, and while remaining tight-lipped about future models, Mr Tata said there would be plenty more to come – including the F-Type, the convertible sports car. The company’s successes – which saw retail sales rise 27 per cent last year to 305,859 units – comes on the back of soaring demand in China, which is on course to become the group’s strongest market.
While JLR has agreed a joint venture with China’s Chery Automobile to establish a production base in the Far East, Mr Tata said Britishness remained at the heart of the company and there were no plans to change that. He said: ‘The two brands have their home in the UK. Their heritage is here and they exude Britishness. Our intention is to retain that and to move back to the glory that the two brands once had and to expand the footprint globally in international markets, also in the UK and western Europe and the US, which is a big and important market.’
‘Now markets like China have emerged, which, amazingly, recognise the heritage and the brands. We are looking at increasing our footprint in China substantially by way of a joint venture. And India has emerged as an interesting potential market. In fact, what we have for our plans in the UK, when we took the company there were lots of rumours about closing down one plant and operating two.
‘Now we are operating three plants full blast, we have added 1,000 people and we are looking at creating the fourth plant in Staffordshire, an advanced engine plant. The UK remains the engineering, creative and major manufacturing base for Jaguar and Land Rover.’
Reports have linked JLR with establishing a new base in Brazil to assemble Freelander 4x4s, as a first step towards full local production of cars in South America’s largest economy. However, Mr Tata said the Chinese plant was the only one currently on the table.
The 74-year-old, who will be succeeded as Tata Group chairman by Cyrus Mistry at the start of next year, said there was no urgent need to build new plants from a capacity perspective, as there are options to alter shift patterns to allow for increased demand. Another alternative would be to outsource sub-assembly, rather than just components, which would also increase capacity. It was reported on Birminghampost.net this week that union leaders have warned workers the Jaguar Castle Bromwich factory is at risk if they do not agree to new working practices.
The warning came against the backdrop of a potential £200 million investment in the plant and ahead of a ballot on a range of new practices, including compulsory Saturday working. In May initial plans were rejected by 1153 against to 756 votes in favour. Mr Tata, who was knighted as a Knight Commander of the Order of the British Empire in 2009, did not speak directly about the ballot, but said the Castle Bromwich plant remained a part of future plans.
He said: ‘Castle Bromwich always seemed to be a question of controversy over rumours it would close. Those fears have proved to be unwarranted because Castle Bromwich is working full blast. It will always be our centre of excellence for our cars and an advanced manufacturing facility. The XJ and XK are produced there and both of them are selling. Today we have no negative plans for Castle Bromwich.’
Meanwhile, work continues on the new £355 million car engine plant being built near Wolverhampton, which will become JLR’s fourth plant and create up to 750 jobs directly and thousands more in the supply chain. Mr Tata, the grandson of Tata Group founder Jamsedji Tata, said there were no plans for a fifth.
The Cornell University and Harvard Business School-educated industrialist said while there was an ‘imbalance’ in parts of the UK engineering sector, the skills remain strong in the UK. He said: ‘There are amazingly high skills, but unfortunately some industries need help. By help I mean financial help and the kind of help that comes from incentives or stimulus packages that the Government might do. It is the strength of the UK but it is latent. It is latent because the user industries have all but disappeared.’
Meanwhile, the Post reported in May that Tata seemed set to pull the plug on plans to introduce an electric vehicle in the UK in a move that could put the electric car dream on hold for the foreseeable future. Just 940 electric cars were sold in Britain last year, a figure that fell short of what had been hoped for and expected by the Government, and Mr Tata said he did not see a bright short-to-medium-term future for electric and hybrid cars.
He said: ‘I don’t think there has been a big step back but we have to realise that electricity is not going to be the new power for all vehicles tomorrow. Batteries are expensive and if there are going to be more electric cars there is going to have to be tremendous intervention from governments to make it happen. We have our foot in the electric business and hybrids but I don’t think we will see many marketable vehicles in the future. The internal combustion engine is going to be around for a long time,’ he added.
‘There might be alternative fuels and biofuels but I don’t think electric cars are going to be a fifth of the cars certainly for the next few years.
[Source: Birmingham Post]
Is the Editor of the Parkers website and price guide, formerly editor of Classic Car Weekly, and launch editor/creator of Modern Classics magazine. Has contributed to various motoring titles including Octane, Practical Classics, Evo, Honest John, CAR magazine, Autocar, Pistonheads, Diesel Car, Practical Performance Car, Performance French Car, Car Mechanics, Jaguar World Monthly, MG Enthusiast, Modern MINI, Practical Classics, Fifth Gear Website, Radio 4, and the the Motoring Independent...
Likes 'conditionally challenged' motors and taking them on unfeasible adventures all across Europe.
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bring back rover as a uk tata
A Forward thinking man that took a huge gamble and is paying off. 12 compulsory Saturdays was probably the sticking point that made the unions reject the proposal first time around but at 72% to 28% in favour (deadwood is still in the industry) this time, JLR’s fortunes are now guaranteed – especially at Castle Brom.
I think that personaly JLR should relaunch Rover as a Muscle car brand that can compete with the 300c and holdens.
@john bu:
I am with you on this idea!
Tata still ahve much to do to cement the future of JLR as acknowledged in the above interview. In the name of all thats holy DO NOT go anywhere near the Rover brand, it has the capacity to completely derail everything JLR has achieved to date.
I agree completely with Paul. Keep well away from Rover.
There is plenty of scope in developing Jaguar and Land Rover.
The X760 range, when it comes out, should achieve volume
sales and greater market penetration. The X761 crossover will also open up new markets. Just keep going as you are!
Even if JLR wanted to release a 300C- type model (a bad idea if you ask me) they don’t own the rights to the Rover name.
They should stick to what they are doing- they are the strongest they have been for many a year.
The 300C is a bit of a joke anyway, a recycled E Class platform that apes (not very subtly) the Bentley saloon- itself not exactly beautiful (but then many of its intended owners place ‘bling’ well ahead of elegance so it doesn’t really matter).
JLR do own the rights to the Rover name in order to prevent a skewing in the Land Rover/Range Rover brands… It was bought from Ford who had previously bought it from BMW for the same reason.
The Rover brand will be a tainted brand for the next two to three generations… sorry but that’s fact. It could be possible but the cars would have to be comparable to VW quality and would have to compete in the same market sectors… Nope, sorry, Rover is on the freeze for a long while yet….
Reading the comments by Mr Ratan Tata it confirms that he is not complacent with the current success of Jaguar Land Rover (JLR) and that there is still a lot to do to make the company an even bigger success story beyond simply the current new model activity and the brands it uses. This shows that Tata takes nothing for granted with the current success of its UK-based automotive subsidiary.
Without adding further fuel to the debate of the ‘Rover Returns’ argument (although I would argue that most comments are nearly always based on UK market only prejudice rather than considering other market territories), any potential for the company to use a further brand beyond Jaguar, Land Rover and Range Rover will surely be a long term aspiration only. In other words, not for at least five years, by which time market conditions and perceptions towards existing and dormant brands might have changed.
If TATA want to grow they will need products in the mass market or co-operation deals with other manufacturers. The TATA name outside of India is really only known for dodgy 4×4’s, commericals and steel. The Rover brand could be used for the mass market cars in Europe, but would it sell elsewhere – not so sure.
If they want to expand, buy the lease of Longbridge off the knuckleheads in China, along with the MG brand, and send them packing. Ratan Tata knows what he is doing. Doesn’t he also own the Tetley tea brand?
And every bugger else in the known working environment works on Saturdays, so why shouldn’t car workers eh? It will mean they have a day off during the week instead. They are not being asked to work 6 days a week. The old BL Communists are alive & well it seems
JLR doesn’t need another brand to expand into the mass market, as they won’t be producing mass market cars.
The big question for me going forward, is whether they have the scale to develop mid market cars by themselves. The Evoque sits on a developed Freelander 2 chassis, which is related to various Ford models, when the time comes to replace the Evoque, will they develop an all new chassis by themselves or collaborate (e.g. with Ford)
some interesting comments above about Rover. I think the Rover brand would do ok if they made small to medium sized cars. to say the rover brand is tarnished is perhaps worth mentioning, but I think the public would become aware quickly that A new Rover is from a very successul Jaguar Land Rover group. Indeed JLR-R could run a add compain that explains any new Rover and what it IS and what it is INTENDED to be. By contrast, the MG6 uses what is still considered by some, a flakey K-series engine, put inside a car made in China with no tangible background'(and leaving its boring toyota looks aside). I dont think that Rover would need to be mass-market either. if they focused on builing say 150000 Rover cars each year, and built them well and aimed at the luxury peformance market they would be quite desireable all around the world. aim for the market that wants to buy a good car to see them through. …or perhaps JLR could buy MG6 shells and put their own panels and engines on them. alex
the other option is to do a Rover city and buy someones reputable body from Ford, or GM, or the chinese and tweek the suspension and trim to suite. this way all the safety stuff is taken care off elsewhere and the market can be tested with a Limited Edition Rover branded car. the City Rover while the first release was apparently not well executed, may have been a lot more successful if it HAD come from JLR and was not designed and produced on a a 10 quid budget. the city rover was a nice looking car from the outside. alex
Why, oh why didn’t the relationship between TATA and MGR develop as well as maybe should have?
Trouble with the City Rover seems to be that management in India and the UK would not listen to the Rover engineers who had good ideas to make it more acceptable in European markets.
Interesting that Tata has pulled the plug (literally) on electric cars in the UK. I worked at a supplier on one of the two Tata UK projects and unfortunately we were rather messed around.
JLR need vehicles with higher mpg to improve the range average and meet legislative requirements. Tata has vehicles not seen in Europe, eg new Indica, Indigo, Vista, Aria which could be improved and rebadged to achieve this.
Not wanting to fan any flames here as a lot of the arguments have been done to death, however………..
I understand why some feel Rover is a tainted brand, however JLR are so far removed from MGR and the K-series engine (unfairly maligned, but obviously what folk are alluding to when they mean ‘tainted’)that they are more than capable of making the Rover name acceptable again.
I think we forget how adept they are at producing cars people want, and marketing them appropriately.
There is the problem though of the very high profile collapse of Rover. It is nigh on impossible to ‘resurrect the dead’ when it comes to any brand name. Rover was a distinctly middle class brand, but thanks to numerous BL farces in the 1970’s, that was when the Rover name was tarnished, and it was almost downhill all the way from then on,re branding the range as Austin Rover & Freight Rover, with the rare high point of the Mk1 200, which went down a storm with the ‘Hyacinth Bucket’ set. The Acclaim really should have sported a Rover badge really, not Triumph. If they had stayed wedded to Honda, and not even bothered making the K series, and spent that money on the rest of the range, who knows what could have happened.
Well done JLR on 1000 more jobs.@Marty B badge snobbery didnt help Rover even when BMW owned-which should have been selling them like a cheap hooker.BMW are great cars to drive but have never been blown away by the interiors,they are emotionless.Functional but thats all.
Good to hear Ratan Tata’s frank and realistic views on JLRs success and that he state’s clearly that despite the current euphoria they must not rest on their laurels.
Regards a return of the ROVER brand, I always thought that had Rover stayed with Honda, cars like the current Accord could be manufactured as another Rover 600 type car (with a bit – or a lot of Richard Woolley’s design flair added). Sadly we know that will not happen
if rover is to return it must be with quality models no going back to making city cars with rover badges thats what spoilt rover in the first place.graham day back in 1987 droped the austin name and said he was taking rover up market when realy he was taking them down market.if rover was relauced i wouldnt make a rover below rover 45 size and that might be coming to far down market but im sure they could make a quality car to sit below jaguar or even make some up to jaguar class with out competing head on.some of the recent land rovers are very car like(evoque)i can not see many of them been used off road that could have been a good model to relauce rover.
JLR success I believe, TATA has no other auto brand to promote internationally un like previous owners, Ford and BMW. Ford & BMW has preference to secure their markets. so JLR was loser at their time.