Jaguar and Land Rover could be owned by an Indian company

As a struggling Ford Motor Company looks to sell some of its crown jewels to raise money and remain competitive (afloat, the cynic might say), there are signals that 2 of the 3 bidders in the fray are Indian companies. Tata Motors and Mahindra & Mahindra are both said to be among the most serious bidders.  US dealers are reportedly concerned that such premier, venerated brands might be sold to an Indian company, and this might make the brands lose their sheen. This argument, is downright racial. The underlying thought process is something that runs thus: India is a poor country and not one known for its cars. As such, an Indian company cannot own what are largely aspirational brands. Further, if an Indian company buys these brands, future automobiles coming from this stable will be shoddy and cheap and hence unworthy of being marketed internationally using brands that have for decades, been prima donnas.

To people that think this way (and to those that buy this line of thought), all I’d say is “get real, folks”. It’s a flattening world out there and just in case you have not noticed, Toyota has overtaken GM as the biggest automobile manufacturer in the world. A lot of new cars are being designed specifically for emerging markets like India- because that is where the money is to be made over the next twenty years or so. And if Ford had been really about superior technology, engineering, manufacturing, supply chain, marketing, HR, Finance and everything else that goes into making a business successful, perhaps it would not find itself in such a pickle now.

It is expected that the successful bidder’s name will be announced sometime early in the new year. There is a private equity buy-out team that has also submitted a bid (reportedly not the highest)- so it is by no means assured that the Tatas or the Mahindras will be the new owners of Jaguar or Land Rover. But even the possibility of this being true is such a refreshingly chak de thought.

And btw, M&M plans to market its Scorpio into the US soon; its tractors are already doing well in that market (even Americans found the M&M tractor quite useful in the relief operations post Hurricane Katrina). And Tata Motors already exports quite a good number of its cars to Europe.

A decade from now, Indian auto-makers may well become major players in the global automotive sector- just as we today dominate the outsourced IT services domain.