Regardless of the price paid and of whether Jaguar is back to what it used to be or not, here are a couple of reasons that make me believe it was smart of Tata to buy Jaguar
- Transfer of technology: (obvious), Tata’s technology is so far behind that what Jaguar engineers will willingly share will help Tata make better cars and ultimately make an entry into more developed markets
- Learning the other markets: By selling jaguar in Europe and the US, Tata will learn what it takes to sell cars there and could prepare to take their future “Tata” global
- Risk mitigation: With all the discussion about the potential crash in emerging economies (India or China) finding shelter in luxury goods can be a smart play
- Greater distribution for Jaguar in the subcontinent and Asia
Of course people might say that this is bad for Jaguar and few synergies can be found with Mittal but Tata has proven for over 100 years that it had a very strong business sense and succeeded in various industries (creating the first steel mill in India, providing electricity to Mumbai, starting the country’s first airline, and being the first to locally make trains).
What they now need is to prove that they can manage a truly global business and capture the value of synergies,... great challenge ahead !
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