Posted on by glennm

This morning’s business news lead is that Ford is selling Jaguar/Land Rover — British auto marques it acquired 10 years ago — to the Tata Group, one of India’s largest conglomerates. Ford Reaches Deal to Sell Land Rover and Jaguar [NYTimes.com].

Tata Motors, part of India’s fast-growing Tata Group, is buying Jaguar and Land Rover from Ford  for $2.3 billion — about half what Ford paid for the brands when it bought them. . . . Tata has been on an overseas acquisition spree in recent years, buying up everything from tea and coffee companies to steel manufacturers. [But] if sales of Jaguar and Land Rover were disappointing under the guidance of [Ford,] a century-old American car maker, will consumers be any more open to buying from a relatively unknown Indian company? Some car shoppers may hesitate, as they did decades ago when Japanese automakers known for small, fuel-efficient offerings began to build luxury sedans.

Now I realize the Indian economy is an emerging middle-class powerhouse and that Tata has excellent capitalization and relatively low labor rates. But I tend to agree with the Times that right now, "Made in India" is hardly a label of technical proficiency or one which consumers — and especially high-end consumers like those looking at Jaguars — would view as either reliable or impressive, let alone ostentatious. I guess the proof of the pudding will be whether Londoners and other wealthy U.K. citizens substitute Aston Martins for their Jaguar convertibles.