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Violent protests lead to Tata relocating their ‘people’s car’ plant
India’s Tata Motors on Friday said it was withdrawing its low-cost Nano car project from the state of West Bengal after more than a month of violent protests by local farmers brought construction to a halt.
The decision by Ratan Tata – one of India’s most respected industrialists – to relocate the $350m factory for its “people’s car” comes as the factory was nearing completion. The company had set a late October deadline for rolling out what is intended to be the world’s cheapest car.
The pull-out – which followed weeks of negotiations between Tata, West Bengal’s government and its opposition leader Mamata Banerjee – highlights the severe difficulties companies face in acquiring land for industrial development in densely populated India.
Farmers had claimed that they were forced to give up their land for the car factory without sufficient compensation, and their protests were stoked and encouraged by Ms Banerjee, seeking to build her political base for her challenge to the state’s elected Communist authorities. India’s Tata Motors on Friday said it was withdrawing its low-cost Nano car project from the state of West Bengal after more than a mo... more -
Tata buys Land Rover and Jaguar for 2.3 billion dollars
DETROIT, Michigan (AP) -- After spending billions of dollars on Jaguar and Land Rover, Ford Motor Co. gave up on the storied British automakers Wednesday and unloaded them to India's Tata Motors Ltd. for a mere third of the original purchase price.
Ford will receive less than half of what it paid for the Jaguar and Land Rovers brands.
The deal is another sign of the growing economic muscle of India and something of an economic role reversal, with two icons of British industrial might expanding the global reach of a premier conglomerate in the former British colony.
Ford nets about $1.7 billion, a far cry from what it paid for the properties -- $2.5 billion for Jaguar in 1989 and $2.7 billion for Land Rover in 2000. Counting losses and product development, analysts figure Ford spent more than $10 billion on the brands.
Those acquisitions, like General Motors' purchase of Saab and Chrysler's entanglement with Mitsubishi, came when cash was rolling in at the U.S. automakers as drivers snapped up cars and pricey pickup trucks and sport utility vehicles.
But Ford's fortunes have changed, with slumping U.S. sales and billions in losses. The fire-sale price comes as the Dearborn, Mich.-based automaker concentrates on its main brands.
"You have to cut your losses at some point," said Erich Merkle, vice president of auto industry forecasting for the consulting firm IRN Inc. in Grand Rapids. "It's been draining them of cash and resources."
Tata is India's oldest and largest conglomerate, with holdings in steel, information technology and autos. It should have the cash to save Jaguar and Land Rover and develop new products to better compete with luxury automakers, Merkle said.
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The proceeds of the deal aren't enough to rescue Ford's finances, but the sale will allow the company to focus on restructuring its core brands, Merkle said. Ford does not break out financial results for its individual brands, but Merkle said Jaguar has never made a profit in the nine years Ford has owned it.
"They were a long time coming to the realization that this thing wasn't working," said Burnham Securities analyst David Healy.
Tata said Ford will continue to supply engines, transmissions and other components for five to nine years. The Indian company said it expects no significant changes for Jaguar and Land Rover's 16,000 workers, and its statements said it would preserve the heritage of the brands. Video Watch a profile of Tata Motors »
Indeed, British Labour Party lawmaker Richard Burden said Tata appeared to recognize the importance of "retaining the essential Britishness of the Jaguar and Land Rover brands."
Some workers were similarly optimistic about the sale and the investment it could bring, but others worried about the future.
"I am pleased I have kept my job. But for how long?" asked Paul Hoyte, 35, a Land Rover worker at Solihull in central England. Video See a report about what the deal means for Jaguar »
The sale raises Tata's profile on the world stage, said V.G. Ramakrishnan, lead auto analyst with the consulting firm Frost and Sullivan India.
"Many people will see this deal as the future of things to come -- you will see more companies out of India acquiring global companies. They want to be seen as major global players," Ramakrishnan said.
Tata, which Ford named the preferred bidder for the British automakers in January, has made a slew of previous acquisitions, including Britain's Tetley Tea and Boston's Ritz Carlton Hotel.
Its Tata Steel Ltd. bought Britain-based Corus Group last year for $13 billion. And in January, Tata Motors unveiled the planet's cheapest car: a $2,500 four-seater that could change the global auto industry.
C. Ramakrishnan, Tata's chief financial officer, said the company paid for Jaguar and Land Rover using a 15-month, $3 billion loan but expects to replace that financing with a mix of equity and debt during the next several months... DETROIT, Michigan (AP) -- After spending billions of dollars on Jaguar and Land Rover, Ford Motor Co. gave up on the storied British a... more -
Tata to Jaguar
"Jaguar is now an Indian beast" roared one Indian newspaper on Thursday as it lauded Tata Motors' long-awaited $2.3 billion deal to bag the sleek British car brand and its chunkier Land Rover counterpart from Ford. "Jaguar is now an Indian beast" roared one Indian newspaper on Thursday as it lauded Tata Motors' long-awaited $2.3 bil... more
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Tata to announce Jaguar purchase
It makes sense that Tata would buy a sexy car maker.... Love Tatas!
It is amazing too think that when Jaguar was winning at Le mans in the 50's Tata was barley a blip in the car industry.
Ford really mess up the brand that was the pride of England. Hopefully Tata will make Jaguar what it should be. It makes sense that Tata would buy a sexy car maker.... Love Tatas! ... more -
India's Tata backs air-power car
Too bad US car makers are missing out....
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Tech News: Fiery Protest Over Tata's Nano
Were farmers thrown off their land to make way for the Tata plant which just unveiled the "cheapest car on the planet" in order to entice Indian families to drive and pollute the air even more? I wouldn't be surprised.//////// excerpt:////////But while the bright lights of the New Delhi Auto Expo were trained on Tata's minicar, activists near Kolkata were burning the car in effigy. The Trinamool Congress, a West Bengal opposition group, torched a mockup of the Nano in protest over land rights at the factory location. "Until farmers get back their land forcibly acquired for the Tata Motors small car plant at Singur, we will not allow the company to manufacture cars there," opposition leader Partha Chatterjee decreed, according to The Economic Times of India.
In New Delhi, a small group of protesters made a less dramatic showing, but their T-shirt slogans were bold, The Times of India reported: "The ($2,500) car has Singur people's blood on it."
Pundits in the Indian media, meanwhile, debated whether the Nano offers more in the way of marketing hype than real consumer value.///////end of excerpt. Were farmers thrown off their land to make way for the Tata plant which just unveiled the "cheapest car on the planet" in or... more -
India Offers Cheapest Car on Earth
There was the $400 airplane seat that plummeted to $40. Then there was the $2,000 laptop reborn for $200. And now the $25,000 car has a $2,500 cousin. The $2,500 car, scheduled for introduction Thursday by the Indian company Tata, swims against the current, with a rear-mounted engine, a trunk that fits little more than a briefcase, and plastics and adhesives replacing metal and bolts in certain nooks. (Some analysts expect the car to be priced closer to $3,000, still making it the cheapest on earth.) There was the $400 airplane seat that plummeted to $40. Then there was the $2,000 laptop reborn for $200. And now the $25,000 car has ... more
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The £1,290 Car
A dream for 50 million middle class Indians, a nightmare for environmentalists the world over. Tata, the people's car of India, is set to flood the country's growing middle class market with this innovative and affordable car. The size of the Indian middle class is expected to grow from 50 million today to 583 million by 2025 making this a trouble causer for our delicate environment.
The factory which makes the car is currently capable of churning out 250,000 of them a year, and there are plans for expansion to 1 million a year. The conundrum of economic and social development crushing any improvement on global carbon emissions just became a stark reality. The car at the centre of it all is to be unveiled to the public on Thursday.
India's middle class is developing fast, and just like Britain's, most aspire to own cars. How to solve this dilemma? A dream for 50 million middle class Indians, a nightmare for environmentalists the world over. Tata, the people's car of India, i... more
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