NEWS AND UPDATES Tata Motors raises production amid strike at Maruti plant

The car maker has more than doubled production capacity at its Pune plant for October
Mumbai: Tata Motors Ltd seems to be stepping on the gas to make the most of the opportunity created by labour strife at Maruti Suzuki India Ltd. Tata Motors technicians complete the final assembly of passenger cars. Photo: Bloomberg. The countrys third largest car maker has more than doubled production of cars at its Pune plant in October to meet demand created by the long waiting periods for its rivals diesel models. The latest strike, which has crippled production at Marutis Manesar plant that produces Swift, Dzire and SX4 models, follows a 13-day protest in June and a 33day lockout that ended on 1 October. Maruti is unable to supply diesel cars. Tata Motors has a strong portfolio of diesel cars and is using it as an opportunity to ramp up, said one of the car makers suppliers who declined to be identified. From 300 units a month, Tata Motors capacity has been increased to 700 units, said another supplier, who also spoke on condition of anonymity. The ramp-up follows the launch of a new variant of the Indica Vista and other models. Tata Motors spokesman Debasis Ray said the production ramp-up is independent of the situation at the rival firm. We are producing at a normal rate, he said, adding that production is dictated by demand and has nothing to do with the strike at Maruti Suzuki. The idea is to produce what is required. New model launches by rival car makers at competitive prices with advanced features have been denting sales at Tata Motors. In the nine months to September, sales at the Pune-based car maker dropped 13.35% to 150,748 units from a year earlier, according to the Society of Indian Automobile Manufacturers (Siam). Tata Motors has also launched an aggressive advertisement campaign. A full-page advertisement in the Hindustan Times and other national dailies on Monday made a direct comparison of the new Indica Vista, fitted with additional features, with Marutis new Swift. Ray said the advertisement was merely to highlight the comparative advantages the new Indica Vista has over the new Swift.

The efforts seem to be paying off. According to dealers in Mumbai, the new Vista has a waiting period of two months not heard of in the recent past for Tata cars. We are seeing this after a long time, said a sales manager at one of the dealers who didnt want to be named. To be sure, its not only Tata Motors that is gaining from Maruti Suzukis production loss. Diesel car sales have also been soaring for other carmakers. General Motors India Pvt. Ltd, for instance, has seen a strong demand for its Beat diesel. There was anyway a pent-up demand for the car. I wont attribute this to the unrest at Maruti, said P. Balendran, senior vice-president at General Motors India. The model, of which the company sold 10,000 units last month, now accounts for half of its total sales, he added. Launched in August, the new Swift has a waiting period for the diesel variant of five-eight months across several cities. Fraught with labour unrest, Maruti has been sitting on an order backlog of at least 100,000 units for the new Swift. All car companies are likely to benefit due to Maruti, but one of the direct beneficiaries will be Tata Motors, said Umesh Karne, an analyst at Bric Securities Ltd. Karne, however, doesn't expect sales to hold up. Sales may taper off after the festive season comes to an end, he said.

TATA MANZA CARS AND PRIMA TRUCKS LAUNCHED IN SOUTH AFRICA

Tata Xenon A familiar face at this years Johannesburg International Motor Show was Tata Motors. The car maker has launched two products in South Africa. The Tata Manza car and Prima range of premium commercial trucks will now be available to buyers in South Africa. Tata Motors also had its other products on display at the motor show. On display were entry level Tata cars like the Vista hatchback and the Tata Venture Multi Purpose van. Among the commercial range of vehicles, Tata Motors had the Tata Super ACE mini truck. Tata Motors also brought their range of special application trucks including the Tata LPTA 1623 44 truck and the V3TXF, 480 hp 6X4 tractor. Mr. P.M. Telang, Tata Motors Managing Director India Operations, said, The new Tata vehicles being introduced in South Africa will bolster our already significant portfolio in the country. These introductions benefit from our innovations and learnings from South Africas customers. We look forward to a deeper presence in South Africa, which is already a focus market for us.

Tata Motors commuter bus Tata LPO 1623 CNG bus, the 65-seater, Tata LPO 1823 commuter bus, Tata Starbus Ultra range (also known as the Y1 Bus) also found their place amidst the exhibits. The Tata Xenon Cargo box and Double cab models are types of vehicles which are popular in this country and thus are important for the auto maker. Tata Motors has introduced the new products in this market only after conducting a detailed study of what their South African customers wants. Further, the car maker hopes to strengthen their hold in the market. Mr. Noel Tata, Managing Director, Tata International Limited, We see Africa as a region of tremendous potential for the group and our participation in the Motor Show with the introduction of the latest products will serve to further strengthen the Tata brand in these markets. In South Africa, the auto industry is making giant strides and we are happy to contribute to this growth.

After initial 20% growth, car sales forecast slashed to 2%

New Delhi Rising interest rates, fuel costs and an uncertain global economic environment saw car sales decline nearly 2 per cent in September to 1.65 lakh units from 1.68 lakh units in the corresponding month last year. The countrys top three car makers Maruti Suzuki, Hyundai Motor and Tata Motors that account for nearly 60 per cent of the total cars sold in India, reported a 7.4 per cent drop in cumulative sales to 1.23 lakh units as compared with 1.33 lakh in the same month last year. The Society of Indian Automobile Manufacturers Association (SIAM) also ruled out any significant turnaround in sales despite the setting in of the festive season. This has prompted SIAM to lower the growth forecast for passenger car sales in the current fiscal to just 2-4 per cent from 18-20 per cent projected at the start of the year. The last time car sales registered low single digit growth was back in October 2010. We have lowered the forecasts because issues of interest rates and fuel costs still remain (for the industry), president of SIAM S Sandilya said. Among the worst hit during the month was Maruti Suzuki which saw its passenger car sales nosedive nearly 18 per cent to 66,667 units from 81,060 units in the corresponding month last year. Tata Motors reported 11 per cent and 2 per cent growth in car sales respectively. However total two-wheeler and commercial vehicle sales continued to grow robustly. During the month the overall sales for two-wheelers grew 24.2 per cent to 12.33 lakh units from 9.92 lakh units in the corresponding month last year. Similarly commercial vehicle sales stood at 70,634 units as against 59,836 units a growth of 18 per cent. Both commercial vehicles and two-wheeler sales have grown at a healthy rate. This is mainly on account of rural development (which has pushed up sales), said Sandilya. He also said above average rainfall and softening in commodity prices could help the industry in the next six months. Etching out the concerns for the industry over the next six months Sandilya said that apart from rising fuel costs and surging interest rates, issues of labour unrest could also put a spoke in the wheels for automobile sales.

Rising higher: Weekly Market Report

October 15, 2011 12:27 PM

If the gains continue, the Nifty may touch 5,210

The market ignored weak domestic indicators and took support from the optimism expressed by European policymakers on helping regional banks in a bid to ease the debt crisis that is plaguing the continent. The market closed with gains of 5%, notching its best weekly performance in the last six weeks.

The market closed with good gains on Monday on across-the-board buying from institutional investors. However, it pared those gains and settled flat on Tuesday. Better-than-expected earnings from IT bellwether Infosys lifted the benchmarks on Wednesday.

A volatile trading session with food inflation staying above the 9% mark for the week ended 1st October saw the market closing lower on Thursday. Institutional buying in IT & technology sectors supported the upmove on Friday. Overall, the Sensex added 850 points to close the week at 17,083 and the Nifty settled at 5,132, up 244 points over the previous week. If the gains continue, the Nifty may touch 5,210.

All sectoral gauges closed higher in the week. BSE IT (up 9%) and BSE TECk (up 8% were at the top while BSE Capital Goods (up 2%) and BSE Healthcare (up 1%) ended at the bottom of the list.

The top Sensex gainers were Tata Motors (up 13%), Infosys, Jindal Steel & Power, Wipro (up 9% each) and Bajaj Auto (up 8%). On the flip side, Maruti Suzuki (down 8%) and Coal India (down 4%) were the losers on the index.

The Nifty was led by Tata Motors (up 13%), Infosys, Wipro, Reliance Infrastructure and Bajaj Auto (up 9% each). The major laggards on the index were Maruti Suzuki (down 8%), Coal India (down 4%), Ranbaxy Laboratories (down 3%) and BPCL (down 2%).

Indias headline inflation increased to 9.72% in September from 8.98% a year ago, raising prospects of yet another interest rate hike by the Reserve Bank of India later this month. This is the 10th consecutive month when the rate of price rise has stayed above 9%.

Food inflation eased marginally for the week ended 1st October at 9.32%, but stayed above 9% for the third week in a row, as prices of vegetables, fruit and milk remained expensive, pinching the common man. Expressing

disappointment, the finance minister said that it may affect the GDP (Gross Domestic Product) growth for the September quarter.

Indias industrial production grew by a dismal 4.1% in August as high interest rates and gloomy global indicators weighed on factory output. A disappointed finance minister Pranab Mukherjee said the numbers are not encouraging... it may affect the GDP of the second (July-September) quarter. For the first quarter, GDP growth was at an 18-month low of 7.7%.

The Society of Indian Automobile Manufacturers (SIAM) has significantly lowered the passenger car sales growth forecast for 2011-12 to 2%-4%, due to lower output at Maruti Suzuki because of labour issues, and higher lending rates.

SIAM had earlier revised the sales forecast for FY11-12 downwards for passenger cars at 10%-12% in July against 16%-18% announced at the beginning of the fiscal.

In international news, Standard & Poors has downgraded Spains credit rating, citing rising worries over sluggish growth and highlighting the vulnerability of the euro-zones bigger economies as the region tries to tackle its sovereign debt crisis.

In a related development, finance ministers and central bankers from the G20 economies are meeting in Paris with the debt crisis in Europe topping the agenda. Pressure mounted amid divisions over whether the euro-zone should take full responsibility for its escalating debt crisis, or whether the rest of the world should help out more.

Chinas consumer price index (CPI) increased 6.1% from a year ago, but the number was down from the August reading of 6.2%. The latest inflation figures confirm that Beijings efforts to ease rising prices are bearing fruit, and reinforce predictions from market-watchers that the central banks tightening cycle is over.

Maruti resumes production partially at Gurgaon and Manesar plant

Like 18 October, 2011, 11:22 IST by Vikas Yogi

The Indian auto giant Maruti Suzuki, which has been struggling with halted production due to a series of workers strikes at its Manesar plant, resumed the production partially on Monday at both of its Manesar and Gurgaon plants. The production was resumed at Manesar plant partially after the workers vacated the plant premises, following a directive of Punjab and Haryana high court. The company was able to roll-out 1700 cars from its Gurgaon plant on Monday as compared to the production of 2800 units per day in normal conditions. The production at both Manesar and Gurgaon plant of Maruti Suzuki India has been affected badly due to a shortage of essential components. It is to be mentioned here that workers at Marutis key component supplier Suzuki Power train India Limited are also on strike in support of Manesar plant workers, since last week. In a statement given on Monday, a company spokesman said, "We have started production in a limited way at the Manesar plant." The talks between company management and workers remained inconclusive on Monday. The workers are demanding the reinstatement of casual workers. In a statement, Maruti Suzuki Employees Union President Sonu Gujjar said, "We have upped the ante against the Maruti management, which broke the October 1 agreement by not allowing 1,100 casual workers to resume duty." The Maruti Suzuki Employees Union, which has not been recognized by the Maruti Suzuki, is spearheading the strike at the Manesar plant.

Car manufacturers offer huge discounts to attract customers during festive season
Tuesday October 4, 2011

With the onset of the festive season, carmakers are offering huge discounts to boost their sales. Discounts are being offered on every model and discounts as high as 25% are being offered on petrol variants. According to Mr. Rajan Paintal, Senior Vice-President (Auto Loans at HDFC Bank), its the best time to buy cars as more and more cars are being offered at lower interest rates and with higher discounts. Currently, cash discounts are being offered on many cars, including the Tata Indica and the Skoda Fabia. Maruti Suzuki India too has increased discounts across its entire line-up. Other than cash discounts, companies such as Maruti Suzuki, Hyundai Motor, Honda Siel Cars, Fiat Auto India, Volkswagen India and Toyota Kirloskar Motor are offering free insurance and maintenance packages, gifting accessories and providing various corporate benefits to their customers. As per industry insiders, the retail sales in India for the month of September, 2011 has not been very encouraging and thus, car manufacturers are offering better deals during October-November 2011 to attract the customers. Car sales in India had dropped by 16% in July 2011 and by 10% in August 2011. Volkswagen has also launched limited period options of its Polo hatchback and the Vento sedan, Breeze, with additional features including a new navigation system, leather seat covers and rear parking distance control at no extra cost as an attempt to attract customers.

Maruti shuts down two of its plant in Haryana on Friday, September 16, 2011
Friday September 16, 2011

Maruti Suzuki closed two of its factories- the Manesar plant and the nearby Gurgaon plant on Friday, September 16, 2011, due to lack of availability of components. A dispute between the management and a section of the union at Maruti Suzukis Manesar plant is snowballing into a full blown labour unrest in the region. Suzuki Motorcycles plant workers have also joined the strike supporting the Manesar plant workers, which has resulted in cutting off vital component supplies to Maruti Suzuki. Thus, due to shortage of engine supply, the company has announced a shutdown at two of its Haryana plants on September 16, 2011. Workers have also gone on strike at the factory of Suzuki Castings, part of Suzuki Powertrain. On August 29, 2011, Maruti asked its workers at Manesar plant to sign a "good conduct bond" only after which they could enter the factory. Maruti justified the need to sign the bond after the company said it discovered "serious and deliberate" quality problems. So far only 116 employees have signed the bond. Maruti also clarified it would not hold talks with the workers at Manesar plant who are part of the socalled Maruti Suzuki Employees Union as the management does not recognize the union. Maruti has refused to back down and had already announced a few days earlier to open a new plant in Gujarat.

India: Maruti Suzuki will supply its latest compact car A-Star to Volkswagen AG
From The Economic TimesFebruary 22, 2011

The Economic Times (New Delhi) - India's largest automobile company Maruti Suzuki will supply its latest compact car A-Star to Volkswagen AG. The car, which will undergo some modifications and design changes, will be sold in India and Asian markets under a new brand, according to senior officials in the automobile industry. The agreement to supply A-Star, Suzuki's fifth global model after Swift, Ritz, SX4 and Grand Vitara will be inked soon. Volkswagen holds 20% stake in Maruti's parent company Suzuki. Volkswagen's decision to choose A-Star comes after two years of Maruti's success of supplying A-Star to another Japanese carmaker Nissan Motors, which re-badges the same car as Pixo for sales through its own network in Europe. A-Star sold as Alto in overseas markets is exclusively made by Maruti Suzuki at its Manesar plant in Haryana. It's a futuristic product specifically developed by parent Suzuki Motor Corp (SMC) for developed markets meeting all its stringent crash safety tests, emission norms and environment regulations. Maruti's engineering team would work closely with VW to tweak the car as per its global market needs, said a senior official from the automobile industry. "There could be some changes in the basic design though the overall technical specs won't be altered," the official added.

Hyundai beats forecasts with strong quarter

The logo of Hyundai Motor is seen on a car displayed at a Hyundai dealership in Seoul July 1, 2011. Credit: Reuters/Truth Leem

By Hyunjoo Jin
SEOUL | Thu Jul 28, 2011 2:43am EDT

(Reuters) - South Korea's Hyundai Motor outperformed its rivals as it reported a consensus-beating 37 percent rise in quarterly profit on Thursday, fueled by strong U.S. sales of popular new models.
Once viewed as a maker of cheap cars with a poor quality record, Hyundai has been a stellar performer even during the global financial crisis, steadily increasing its global market share and nearly doubling its share price to a record high last month. Its ability to sustain strong growth, however, will be put to the test in the coming months as Hyundai faces a strengthening won, rising competition and uneven global economic recovery. Its Japanese rivals are also quickly recovering to boost their production back to pre-earthquake levels. "Solid growth will continue in the second half but it may lose some momentum as its Japanese rivals are recovering fast and that will provide a more level playing field for Hyundai, which has benefited from its rivals' struggle in the first half," said Ko Seung-jae, a fund manager at Dream Asset in Seoul. "It's shares are unlikely to fall from the current level but don't have much upside potential either, given the balance of risk factors," he said. Shares in Hyundai Motor have jumped 40 percent this year, outperforming the wider market's 6 percent gain. The stock fell 1.65 percent after the results, versus a 0.85 percent drop in the KOSPI. The stock has risen 10-fold in the past 10 years. STRONGEST CHALLENGER Hyundai has emerged as the strongest challenger to Japanese automakers, aided by improved product quality, a previously cheaper won, affordable prices and savvy marketing strategies. The firm, the world's fifth-largest auto maker along with affiliate Kia Motors, on Thursday reported a 2.3 trillion won ($2.2 billion) net profit for the April to June quarter, compared with a consensus forecast of 2.1 trillion won from Thomson Reuters I/B/E/S. That was up from a 1.7 trillion won net profit a year ago and from 1.9 trillion won in the first quarter, helped by record vehicle sales.

Hyundai said its global car sales rose 13 percent to a record 1.03 million vehicles in the second quarter from a year earlier. Hyundai warned on Thursday a strengthening won, fiscal problems in Europe and new model launches by its rivals are major threats for its growth in the second half of this year. "Overall, the global automaker environment will not be easy in the second half," Lee Won-hee, chief financial officer of Hyundai told analysts, after the results were announced. "We expect Japanese carmakers to adopt a strategy to aggressively expand market share in the United States and other markets." Nissan Motor Co on Wednesday reported a smaller-than-expected 10.4 percent fall in quarterly operating profit as it recovered from a parts shortage that hammered the industry after the March 11 earthquake in Japan. The won is among the best performing emerging-market currencies so far this year, up 8 percent against the dollar, and investors are betting the currency has more room to gain in the coming months. From this year, Hyundai has been reporting earnings on a consolidated basis to reflect the earnings of its affiliates, including financial operations, under new accounting rules. Hyundai's U.S. market share jumped to 5.5 percent in the second quarter from 4.7 percent a year earlier, driven by strong sales of its Sonata sedan and Elantra compact, while its Japanese rivals suffered from production disruptions. Those steady gains led Hyundai to raise its U.S. sales target for this year by 6 percent to 624,000 vehicles. Hyundai also gained traction in its home market, helped by brisk sales of its new Grandeur sedan. ($1 = 1,050.00 Korean Won) (Additional reporting by Miyoung Kim, Ju-min Park and Tae-yi Kim; Editing by Matt Driskill and Jonathan Hopfner)

Hyundai Adds Cheapest Car in India Lineup in Challenge to Suzuki

October 13, 2011,

Oct. 13 (Bloomberg) -- Hyundai Motor Co., poised to earn the most profit among Asian carmakers this year, will step up its campaign to weaken Suzuki Motor Corp.s loosening grip on Indias automobile market with a new hatchback. The Seoul-based company today introduced the Eon, its cheapest model in India so far, with a price starting from 269,999 rupees ($5,496). Maruti Suzuki India Ltd., which sells the nations best-selling Alto car starting from 235,413 rupees, unveiled a version of the model with features including leather seats and an upgraded audio system today.

Hyundai, led by Chairman Chung Mong-Koo, has gained market share worldwide from Toyota Motor Corp. and Honda Motor Co. as Japanese carmakers reel from a strong yen and disruptions stemming from the record earthquake that devastated the country in March. The move raises the pressure on Maruti Suzuki, which has seen its share of Asias third-largest car market drop amid mounting competition and a labor strike thats hobbled output. The Eon is going to be the biggest headache for Maruti, said Deepesh Rathore, the New Delhibased India head of IHS Automotive. It is unfortunate timing for Maruti as theyre struggling with the labor issue. The Eon is going to add to those problems. Maruti declined 2.5 percent to 1,058.25 rupees, the lowest since July 2009, at the close in Mumbai trading. Hyundai gained 2.2 percent to 212,000 won, the highest since Aug. 3, in Seoul. Hyundai expects to sell 140,000 to 150,000 Eon cars a year, Arvind Saxena, Hyundais India director for sales and marketing, said at a press conference in New Delhi today. Small Cars Compacts and mini-cars accounted for more than 75 percent of total passenger-car sales in the nation in the year ended March 31, according to data released by the Society of Indian Automobile Manufacturers. Maruti had 43 percent of the total Indian passenger-car market in the six months ended September, compared with 20 percent for Hyundai, the data show. I will refrain from commenting on the Eon until we see the car, Mayank Pareek, head of sales at Maruti, said by phone yesterday. Weve always been saying that India will be a small car market. Now everybody is getting into small cars. The industry group lowered its growth forecast to as low as 2 percent for the year ending March 31. In July, the group said it expected sales to rise 10 percent to 12 percent. Deliveries are forecast to grow at the slowest pace in three years after the Reserve Bank of India raised interest rates 12 times since mid-March 2010 to rein in inflation, driving down demand for cars in a country where about 80 percent of purchases are funded by loans. Cheaper, Fuel Efficient With rising interest rates and fuel prices, people will opt for cheaper and more fuel efficient cars, Saxena said. The Eon should be the best-selling model in the near future. The Korean automakers India passenger-car sales rose 5 percent to 180,616 in the first six months of the fiscal year, bucking a 1.4 percent industrywide sales decline, according to data from the industry group. The Indian unit of Suzuki Motor Corp. stopped production at its factory in Manesar, near New Delhi, on Oct. 7, the third time since June, when the workers went on strike for 11 days to demand recognition of an employees union and better working conditions.

The disruptions have taken a toll on deliveries, which fell 12 percent to 390,878 cars in the April to September period, according to the industry group. The introduction of the Eon will increase the competition in the segment, said Yaresh Kothari, an analyst with Angel Broking Ltd. in Mumbai who has an accumulate rating on Maruti. Hyundai still doesnt have the kind of reach Maruti has, but it will be tough for Maruti

HYUNDAI MOTOR REPORTS 2011 FIRST HALF EARNINGS

-Hyundai sells 1.96 million units worldwide in the first half of 2011 -Sales revenue and net profit stand at 38.3 trillion won and 4.2 trillion won

Hyundai Motor Company, South Koreas largest automaker, sold 1,958,218 units (domestic: 343,896 / overseas: 1,614,322) worldwide in the first six months of 2011, up 11 percent from the same period a year earlier, helped by the launch of new products. Hyundai Motor posted solid earnings based on its world-class quality and strong product competitiveness: Net profit rose 41.3 percent to 4.18 trillion won (including non controlling interest) in the first half from a year earlier. Hyundai Motors operating profit stood at 3.95 trillion won on sales revenues of 38.32 trillion won (Auto business: 32.9 trillion / Finance and others: 5.43 trillion). Sales revenues increased 20.2 percent due to a rise in sales volume and improved product mix. Sales in the Korean domestic market and overseas markets (export: 563,072 / overseas plants: 1,051,250) all rose, led by new products such as the new Grandeur (badged as Azera in some markets), Accent (badged as Verna/Solaris in some markets) and Elantra (badged as Avante in Korea). Hyundai Motor will continue to focus on qualitative growth by strengthening its product competitiveness and introducing innovative marketing programs. The company will also accelerate the development of its eco-friendly car line up, including vehicles with high fuel efficiency and low emissions, to give consumers a wider range of choices amid high fuel prices.

Tatas Jaguar acquisition and Ferrari ride

depth analysis on TATA acquistion of Fords Jaguar and Land Rover

Tata group which is responsible for Indias biggest foreign takeover, by acquiring the British steel company Corus through his Tata Steel business for 6.7bn earlier this year, is now reckoning for another big acquisition, this time for its automotive division. Tata Motors is in the early stages of evaluating a bid for the Jaguar and Land Rover reported British daily The Telegraph.. Ratan Tata is understood to have instructed advisers in the past fortnight to begin evaluating the merits of a joint offer for Jaguar and Land Rover, which have been earmarked for disposal by struggling American car giant Ford. People close to the situation last night said that Tata Motors evaluation of a bid was at an exploratory stage and may not lead to a formal bid for the two brands. One person familiar with the position said that Tata Motors had signed a confidentiality agreement with Ford in recent days. .Besides Tata, other car makers from middle east and eastern car manufacturers may be interested in bidding, while a formal auction would also be likely to attract private equity firms such as Apollo, Blackstone and Cerberus ( theUS buyout firm which acquired Chrysler earlier this year for $7.5bn). Price of the luxury brands: Analyst believe anything between $2.5bn to $3bn for jaguar and Land Rover. Here is their words A Meryll Lynch analysts suggest that Jaguar and Land Rover may fetch about $1.5bn (735m). Earlier a private equity firm called Alchemy Partners was said to be lining up a 3bn offer for the two luxury brands. If you look at the financial position, [Jaguar and Land Rover] are worth some $1bn to $1.5bn, Mr Dorris an analyst said. Add a control premium, and the final sales price could come in at about $2.5bn. Ford bought Jaguar for 1.6bn in 1989 and it is believed that Ford have invested about $10bn in Jaguar since it bought, Ford bought the Land Rover from BMW for 1.7bn in 2000. What may hamper Tatas?

Union leaders of both Jaguar and Land Rover have already raised concerns about their job security because of the sale.

Jaguars sales were down nearly 32 percent for 2006 in the United States, the companys largest market.

Jaguar lost more than $715 million last year and is expected to lose $550 million in 2007. According to the analysis, Jaguar is projected to lose more than $300 million in 2008 and is not expecting a profit for several years. These losses are mainly because of extremely high manufacturing costs in Britain and Ford has not earn a profit from jaguar since it bought.

Land Rover sold a record 192,500 vehicles in 2006 and is said to be profitable. Unlike the jaguar, Land Rover is a much stronger and more profitable business but Tatas has to buy both the units since the products and manufacturing of vehicles for Land Rover and Jaguar is so intertwined..

The worried jaguar s workers, they told if the two companies are sold together, then there was no guarantee that a new owner would not shut down most of Jags manufacturing capacity.

Official Words from Tata and Ford A spokesman for Tata Motors said the group did not comment on speculation about mergers and acquisitions. Though Ford denied it, Ford had told that it was still some way from doing a deal, it also added hat it had been looking at its options for a year, and that it was neither setting a timeframe for any decision, nor ruling out any options.
is Mahindra in the race? Mahindra & Mahindra (M&M) might also show interest in these brand.

M&M which wants to be global SUV maker should have an interest, at least, in Land Rover, says the brand is attractive. Even so, it will not help Mahindra become an independent global sports utility vehicle, or SUV, brand. Moreover, Land Rover, which is about six times as big as M&M, might simply be unaffordable.
I do not know what is on offer, whether it is the whole brand, or some products or what plants are

being offered. I cannot say if it is a strategic fit or not. Mahindra is a SUV brand and Land Rover is an SUV brand. So, the two brands have something where synergy is possible. But having said that, its a big company, said Pawan Goenka, President-Automotive Sector, Mahindra & Mahindra.
European car manufacturers Renault and Fiat have recently ruled out of the possibility of bidding for Jaguar and Land Rover.Ford the struggling auto giant:

Ford which has become struggling automaker in recent years posted a full-year 2006 net loss of $12.7 billion, the largest single-year loss in the companys history. Also Ford lost its No. 2 ranking worldwide to Japans Toyota. Ford Chief Executive Officer Alan Mulally, who took over the top post in September 2006 from Bill Ford has been restructuring Ford to counter losses. As a part of restructuring Ford has been selling assets in a bid to offset falling sales and profits. Premier Group, which includes Aston Martin,

Volvo,Land Rover and Jaguar is the main cause for Ford continuing losses. Earlier this year Ford sold its UK based sports car division Aston Martin(popularly known as james bond car) for $848 million to investors led by U.K. auto-racing champion David Richards. Many believed that Ford was in talks with Germanys BMW to divest the Volvo brand but Ford denied any such sale of Volvo. Ford reported a loss of $282m for the first three months of 2007. Tatas Ferrari ride: Soon we can see the Ferraris cruising in India roads, as an extension of the existing Tata-Fiat(parent company of Ferrari) partnership, Fiat is planning to drive Ferrari into India and its navigator will be the Tata Motors. The worlds favourite sports car Ferrari will zoom into Indias exclusive sports car market currently dominated by porsche. The two new Ferraris to be launched in India would be a 612 Grand Tourer, a big four seater and F430, an absolute sports car which is performance oriented. Tata Motors will market and set up engineering centers as a post sale services for these cars. After some bad experiences in China and Russia, Ferrari did not want to take chances by going it alone. With Tatas in fold, the Italian major is expecting a solid infrastructure back up in India. Ferrari and Tata are natural partners because Ferrari already gets lot of its software done from TCS. source: NDTV profit