The automotive industry is unique because car makers have to think and act today to make the kind of cars people will drive half a decade down the line and sometimes even more. It’s unfair to look at the automotive industry on a year-on-year basis. Automakers have to see the future and as everyone knows, it’s not an easy task.
The boss of Jaguar Land Rover’s Indian parent company Tata has warned that lengthy shutdowns of its factories cannot be ruled out.Tata Motors announced a whopping consolidated loss of Rs 2,505 crore for the year ended March 2009, its first loss in seven years. This was largely due to its UK-based operations of JLR (Jaguar Land Rover), which reported a loss of about Rs 2,448 crore for ten months (since June 2008) ended March 2009.
The $2.3 billion that the company paid to acquire Jaguar and Land Rover from Ford may look a bit hefty in today’s depressed times, but Tata Motors is actually quite lucky. The reason Tata is lucky is because the Indian auto giant is now reaping the harvest from the seeds sown by Ford. With Ford’s backing, Jaguar pushed the boundaries to create two superlative cars, the XK coupe/convertible in 2006 the XF sedan in 2007. These models overturned established benchmarks set by their contemporary rivals across the Atlantic.
But will the Indian luxury car customer be swayed away from the German trio comprising Mercedes-Benz, BMW and Audi and go out and buy himself a Jaguar? To keep up with this tough competition, Tata’s effort in the first phase should be to establish the brand appropriately rather than focus on pushing volumes. The support structure for selling Jaguars is being put in place, and Tata Motors hopes to set up showrooms in Delhi, Bangalore, Chennai, Hyderabad and Pune by 2010.establishing a dealership network is the biggest challenge for Jaguar in India. But that’s for the short term.
The bigger challenge for Jaguar is to sustain its premium pricing and convince customers it’s a cut above the Teutons. Perhaps its quintessential Britishness, seductive looks, thoroughbred performance and quality craftsmanship will help. And perhaps a little bit of Tata Motors’ luck as well.