Jaguar and Land Rover result in big profits for Tata Motors 12/03/2010
The acquisition of the once-struggling British luxury car brands Jaguar and Land Rover by Tata Motors has helped the Indian automaker return increased profits, reports Investor's Business Daily.
The Mumbai-based Tata first purchased the two luxury brands from Ford Motor Company in 2008 for $2.3 billion before working to reduce expenditures and streamline operations.
Automotive experts believe that the fact that Tata does not own any other luxury marques allowed it to devote all its attention to the combined Jaguar-Land Rover unit, whereas previous owner Ford had its focus diverted to other upscale brands like Lincoln and Mercury.
"Focus was a big factor," Efraim Levy, a senior auto equity analyst at Standard & Poor's, told the news outlet.
Thanks to the high level of focus and the improved operations of the luxury unit, Jaguar and Land Rover have been one of the main driving forces for Tata's profit margin over the past six months, according to the source.
In addition to helping boost the company's profit margins, Jaguar and Land Rover are seen as an effort by Tata executives to prove that they can compete with the auto industry's leading global manufacturers.