New Delhi: The Tata Group Chairman Ratan
Naval Tata has termed the acquisitions of the British marquees
Jaguar Land Rover as 'strategic' and 'worthwhile' and said the
company will strive to bring the old glory of the brands.
He also said that JLR is likely to continue importing
into the country rather than setting up an assembly line here.
In an interview to The Wall Street Journal, the 71-year
old Tata Group patriarch said, "If we assume that the global
meltdown is a phenomenon that will be over in the near term, I
think we will look back and say that these (JLR & Corus buys)
are very strategic and worthwhile acquisitions."
The Tatas had acquired Jaguar Land Rover (JLR) from Ford
Motor for USD 2.3 billion last year. The salt-to-software
conglomerate had pumped more than 1.2 billion pound into these
iconic British brands since then to keep the plants running
amidst declining sales. It bought Corus Steel for close to
USD 13 billion three years ago.
"There were many questions raised regarding whether these
two large acquisitions -- Corus and JLR -- are worthwhile and
whether the prices were right in terms of being at the top of
the market, virtually. My view on that is that if you want to
buy a house and that house is of a particular value, then it
may not be there if you wait," Tata said.
He said the JLR acquisition gave the Tatas international
brands which would have otherwise taken "many years and
billions of dollars" to establish in foreign markets.
"We have been careful not to try to create a gravy out of
this one and sort of merge it with Indian operations. We have
brands to nurture and hopefully bring back to their former
glory," Tata added.
About JLR's India plans, he said: "We have one retail
outlet in the country and it is just imports against orders.
It will never be the same until we look at another phase where
there would be assembly in India which in turn will depend
upon the interest level and the ability of JLR to make that
commitment to invest in India."
He said the company will, for the time being, continue to
import JLR models to India. "I think JLR would at present
moment continue to just look at importing to India and look at
improving and securing its position in the territories in
which it is strong," Tata said.
Admitting that the acquisition of JLR hit the company's
financial position, he said it was able to repay borrowings
worth USD 3 billion by raising new capital, liquidating assets
and cost cutting.
Regarding doubts in the British trade union circles about
the JLR deal, Tata said the company received support from the
workforce at the British plants.
"The only area I think where we had some explaining to do
or clarifying to do was the apprehensions that we would move
manufacturing facilities to India and that was easy to put to
rest as that was never our intention," he said.
Bureau Report
First Published: Wednesday, November 18, 2009, 21:31