When bankers lend and experts nod, it is a vote of confidence. The £1.3 billion-plus take-over by Tata Group of Jaguar and Land Rover, so far called Ford's English Patient, has generated debate in the City and the corporate world as to whether Tata can revive the marque.
The manner in which the group has raised a $3 billion loan for the deal in a global financial market gripped by turmoil has signalled that for the key people who sign the big cheques that matter, Ratan Tata is the good doctor for the English Patient.
The timing of the purchase by Tata is also regarded as better than when Ford bought the famous marque for £1.6 billion in 1989. Land Rover, which makes up for half of the acquisition value, is not ailing. The four-wheel-drive vehicle specialist made about $1 billion in 2007. But Jaguar lost nearly $250 million. Sales of Jaguar was half last year compared to its heyday sales in 2003.
But the decision by Tata to retain the current heads, who have ideas to invigorate the Jaguar brand, is seen as a sign of the recovery of the loss-making marque. Tata will however, need money to widen its range, which experts believe will be done.
Lord Meghnad Desai, the noted economist, told
that Tata will succeed. "Look, when he bought Corus, it was said he paid too much for it. It will not be viable, but he has succeeded there. The reason is that he has a very good management style. He does not unnecessarily tinker with the existing organisation. He did not bring Indian managers from Tata Steel to manage Corus."
Desai said Ford made a mistake by trying to make Jaguar a mass product. "It was a luxury brand and should have been pitched into the luxury niche market. We hear Tatas plan to do that with newer versions of Jaguar," he said.