How Ratan Tata triumphed after Ford Snub

Tata Motors, then Tata Engineering and Locomotive Company, bought Jaguar Land Rover in 2008 (file).

New Delhi:

Ratan Tata, industrialist, philanthropist and popular national leader, died late Wednesday at the age of 86. A towering figure in Indian and global business circles, he leaves behind a grieving nation and a war chest full of lessons, including the story of how he bought Jaguar and Land Rover.

In March 2008, the automotive world took notice of India.

As a new day dawned in the United Kingdom and across the pond in the United States, newspapers reported on Tata Group's estimated $2.3 billion purchase of Ford-owned British brands Jaguar and Land Rover and thus beat compatriots Mahindra and Mahindra.

It was the Indian automobile industry's “Neil Armstrong moment” – “one small step for the Tatas, one giant leap for the country's corporate brand.” It was also a moment of personal triumph for Ratan Tata after he was rejected by the American brand when he tried to sell a manufacturing unit.

The story begins in 1998 with the launch of Tata Indica.

The Indica was India's first diesel-powered hatchback and was widely considered to be the first car designed and manufactured in the country. It was also a car that was close to Mr. Tata's heart.

However, sales were poor and a dejected Ratan Tata, wanting to cut his losses, flew to the US to offer the plant to then Ford boss Bill Ford. The meeting didn't go according to plan.

Mr Ford reportedly reprimanded Mr Tata, saying the Indian company should never have started producing cars and that buying the plant was a “favor” for the Tatas.

Production of the Tata Indica ended in 2018, two decades after it was first launched (file).

A “humiliated” Ratan Tata rejected his offer to Ford and returned home with renewed focus and determination and a very clear goal: to prove his doubters and critics wrong.

Nine years later – after making Indica a success, with European and African exports in 2004 and domestic sales of ₹1.42 lakh in 2007 – he did just that.

In 2008, Ford was having problems.

The recession that rocked the American economy took its toll and the company was on the verge of bankruptcy. In fact, it could have happened if there hadn't been a government credit line.

Always aware of this, Ratan Tata moved quickly to snap up Jaguar and Land Rover, forcing Ford (reportedly) to acknowledge that the Indian company was doing him a “favor.”

The joint ventures with Marco Polo buses in Brazil, Daewoo trucks from South Korea, Fiat Chrysler, Hitachi Heavy Machinery and an aerospace and defense division – all demonstrate the courage of Tata Motors.

And their strongest leader ever- #RatanTata Ji.

— Vedant Birla (@birla_vedant) June 2, 2022

For Mr Tata, the deal may have had an element of revenge, but it was also good business.

Although Jaguar was struggling at the time, it is one of the most exclusive and well-known sports and luxury car manufacturers in the world, and Land Rover has enjoyed record sales over the past three years.

This included raising $1 billion in 2007/08.

READ | Ratan Tata: Industrialist, Philanthropist and Indian Icon

“There is no reason to tinker with the brands… our challenge is to make them grow,” Tata said a few days after announcing the deal at the Geneva Motor Show in Switzerland.

And they have grown. JLR, or Jaguar Land Rover, sales rose from ₹9,871 crore in 2011 to over ₹25,000 crore in 2018. For FY24, the company said it sold over four million vehicles.

The entire episode showed the world what hard work, determination and resilience can achieve, posted industrialist Vedant Birla on X in June 2022, on the 14th anniversary of this groundbreaking moment.

“Tata entered the global automobile industry from then on and has been a global player ever since…”

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