Tata Motors Will Not Sell Jaguar Land Rover… Oh yes It Will
Deluded British automotive brands, Jaguar and Land Rover, are loss-making money pits for owner Tata Motors. The company markets it’s premium luxury status by paying celebrities to look good and pontificate from scripted statements. But Jaguar Land Rover is losing money, the company posted an annual loss of $4bn for 2018. And the only positive outlook for JLR is they are on course to post another annual loss. At least that is a sign of consistency.
When Jaguar Land Rover was posting annual profits, those profits essentially bailed out losses made by parent company Tata Motors. With both companies making a 2018 loss Tata Motors is having to borrow money to prop up Jaguar Land Rover’s future expansion.
It’s fair to say Jaguar Land Rover is walking on a profit and loss tightrope. Sales have remained stable in the UK and US markets thus far in 2019. However, the key Chinese market is in freefall right now.
Poor reliability has seen a customer backlash in China. Jaguar Land Rover has only themselves to blame. Meanwhile, speculation about Tata Motors selling Jaguar Land Rover to the PSA Group has gone into overdrive.
Talks between PSA and the Indian conglomerate are said to have been explorative and relate to a cost-saving partnership. Tata Motors has denied it is preparing the groundwork to sell Jaguar Land Rover.
Part of Jaguar Land Rover’s problem is that it has been slow to shift away from diesel and petrol cars. This is particularly compounded by the fact that JLR invested heavily in a new engine production plant. The magnetic effects of Brexit and poor reliability have further compounded JLR’s misery.
The biggest failure is to plan ahead for a new generation of powertrains, one not reliant on fossil fuels. But it also highlights another issue. Jaguar Land Rover isn’t making enough profits to diversify into a electric and hybrid future.
So the question is will Tata Motors sell Jaguar Land Rover? Yes, it is inevitable. The exploratory talks with PSA are the beginning of the end of Tata Motors ownership of Jaguar Land Rover.