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Tata Motors Of India Buys Jaguar, Land Rover From Ford Motor Co.

Tata Motors Of India Buys Jaguar, Land Rover From Ford Motor Co. 1Tata Motors, Ltd., the Indian manufacturer which two months ago debuted the world’s least expensive car, has shifted automotive gears and acquired two storied luxury brands, Jaguar and Land Rover. The deal involves Ford Motor Co. selling Jaguar and Land Rover to Tata Motors for about $1.7 billion.

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The price is about one-third of what Ford paid for the two brands. According to the Associated Press, the transaction will “expand the Indian carmaker’s reach around the globe and give Jaguar and Land Rover capital to update and expand their product lines.”

The sale had been in the works for months as Ford sought money to fund its turnaround plan.

Tata will pay $2.3 billion for the British brands, but Ford will pay about $600 million into the Jaguar-Land Rover pension fund when the deal closes, Tata’s statement said.Tata Motors Of India Buys Jaguar, Land Rover From Ford Motor Co. 2

Ford bought Jaguar for $2.5 billion in 1989 and Land Rover for $2.7 billion in 2000.

Tata said it expects no significant changes in the terms of employment for Jaguar and Land Rover’s 16,000 workers, and the transfer of the brands will occur this summer.

Ford CEO Alan Mulally said in a statement: “Now, it is time for Ford to concentrate on integrating the Ford brand globally, as we implement our plan to create a strong Ford Motor Company that delivers profitable growth for all.”

Tata said in its statement Ford would continue to supply engines, transmissions and other components “for differing periods.” Ford also will continue to provide environmental and other technologies as well as engineering support.

Ford had hoped to turn Jaguar, founded in 1922, into a high-volume brand that could compete with BMW and Mercedes-Benz. But its entry-level X-Type sedan, introduced in 2001 to lure younger buyers, sold poorly. Jaguar’s U.S. sales were down 24 percent last year.Tata Motors Of India Buys Jaguar, Land Rover From Ford Motor Co. 3Land Rover, founded in 1948, has fared better thanks to popular products such as the Range Rover Sport and LR2. Land Rover’s U.S. sales were up 4 percent last year.

But unlike Jaguar, which has improved its quality rankings under Ford, Land Rover placed last in J.D. Power and Associates’ rankings of initial quality and dependability in 2007. The rankings measure problems per vehicle after 90 days and again after three years of ownership.

Tata Motors is part of Tata Group, India’s oldest and largest conglomerate.

Last January, Tata unveiled the Nano, a four-seater with a two-cylinder, 624cc gasoline engine located under the rear seat. Its cost will be just under $2,500 or 100,000 Rupees, the Indian currency.

The manufacturer claims that the 33 horsepower engine meets current Euro IV emissions standards and is cleaner than most of the current scooters in India.

The Nano will be available in three trim levels all with the low base price and all without air conditioning. Two additional models will include air conditioning. The interior includes non-reclining seating for four, a four-speed manual transmission and a dashboard with speedometer, fuel gauge and oil light.

Tata believes the Nano, which it’s calling “The People’s Car,” will achieve 54 mpg and should be available to the Indian public this summer. The manufacturer has expected sales of 500,00 units annually.

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