The story of the Tata Group and Ratan Tata over the past 20 years is one of growth and competition, productivity and efficiency gains, and globalization and innovation. The Tata story is replete with run-ins with the establishment and the political opposition, and failures and frustrations. And, in some ways, it is the story of India itself, only with a happier ending.
“Tata was at the right place at the right time, and could see what was happening around him and respond accordingly,” said business historian and author Gita Piramal.
The Tata Motors Story Under Ratan Tata
Indica
In January 1998, Ratan Naval Tata, chairman of Tata Motors Ltd and head of the Tata group, walked out onto a brightly lit stage in a hall in New Delhi’s Pragati Maidan to announce something that would forever change the fortunes of India’s largest truck maker.
The dimensions of a (Maruti) Zen, the cabin size of an Ambassador and the fuel efficiency of a Maruti 800—that was the promise with which Tata announced the Indica, the company’s car.
The launch was presided over by then industry minister Murasoli Maran and Tata dedicated it to India. The symbolism wasn’t lost on anyone present at the launch during Auto Expo, India’s biennial car show: Maran was fighting a bruising battle with Suzuki Motor Corp. over the management of Maruti Udyog Ltd (now Maruti Suzuki India Ltd) in which the state and the Japanese firm were equal partners.
Later that year, bookings opened for the car, and a little over 100,000 people signed up and paid an advance for the Indica.NextMAds
Despite the manufacturing and quality problems the initial lot of vehicles ran into (and the Rs 500 crore loss Tata Motors declared in 2001), the Indica became a best-seller and marked the real entry of Tata Motors into cars, although the company had already signalled its intent with the launch of the Sierra, which would be called a cross-over vehicle today, and the Estate, a station wagon.
The Indica would change the trajectory of Tata Motors, but it was also more than just a car. Recent history is partial to the Nano, the “ ₹ 1 lakh” car launched by Tata in 2009, but it was the Indica that started it all.
The launch was a sign that Tata Motors had made the transition to serious car-making, an indication of the manufacturing and operational renaissance that characterized the Tata group in the late 1990s and the early 2000s.
The Visionary Dream: Inception of the Tata Nano
In 2003, visionary industrialist Ratan Tata conceived an audacious dream — to create a safe, affordable car for India’s emerging middle class. This dream led to the birth of the Tata Nano, the “people’s car,” symbolizing compassion and commitment to uplift millions.
In 2009, the Tata Nano finally made its debut, capturing the world’s imagination with its affordability and innovation. Despite initial setbacks, Tata Motors sold over 2.75 lakh units of the Nano by 2018, symbolizing a remarkable journey from adversity to success.
Ford v/s Tata Motors: Ratan Tata’s $2.3 billion ‘revenge’
Tata Motors produces some of the world’s most inexpensive cars, as well as some of the most expensive ones. You might be familiar with Tata Motors’s acquisition of Jaguar Land Rover, makers of prestigious cars like the Range Rover and Jaguar F-type. This acquisition is not surprising now, as Ratan Tata has been known for some big-ticket acquisitions.
But what might fascinate you is that this acquisition wasn’t only about business – it was also a sort of “revenge” that Ratan Tata took on Ford. Revenge?
This is a riveting story of a disagreement between Tata and Ford, and Ratan Tata’s “revenge” through the acquisition of Jaguar Land Rover, examining the history of the brands and the dramatic turn of events that unfolded since 1999.
Back in 1999, when Ratan Tata and his team presented their fledgling car business to Ford, they were met with disdain. The Ford representatives questioned their expertise and even wondered why they ventured into the passenger car division. In a Detroit meeting, Ford officials arrogantly offered to buy out Tata’s struggling car division, belittling them in the process. Tata was meeting Ford in a bid to sell its passenger car business due to the lacklustre response to their debut hatchback, “Tata Indica”.
Ford told Tata they would be “doing them a favour” by buying the car business. This incident didn’t go down well with Ratan Tata and he called off the sale, and instead worked with determination on the Tata car brand.
Ford paid $2.5 billion for Jaguar in 1989 and $2.7 billion for Land Rover in 2000, but managed just $1.7 billion from the sale of the two brands. Ford sold Jaguar mostly because of losses it had experienced at the time ($700 million), and over the course of its 19-year ownership of Jaguar, according to some estimates, cumulative losses of $10 billion.
As the global financial crisis struck in 2008, Ford faced severe financial woes, pushing it to the brink of bankruptcy. Amidst this turmoil, Ratan Tata seized the opportunity to exact his revenge. Tata Motors, now a significant player in the automotive industry, acquired Jaguar Land Rover from Ford for a mere $2.3 billion. This all-cash transaction marked a remarkable turnaround for Ratan Tata, who had been scorned by Ford nearly a decade earlier.
The tables turned, and the diversified conglomerate, spanning from salt to software, managed to outshine the struggling Ford.
Ratan Tata’s vision for Jaguar and Land Rover went beyond the acquisition; it was about restoring their former glory. Armed with a strategic approach, Tata focused on three key areas: improving liquidity, cost control, and introducing new products. His commitment to turning the brands around was evident through a massive infusion of funds and resources.
Ratan Tata Passes Away At 86
Veteran industrialist and Tata Sons Chairman Emeritus Ratan Tata died at the age of 86 late on Wednesday. He was admitted to Mumbai’s Breach Candy Hospital since Monday due to a sudden drop in blood pressure and was in critical condition in the intensive care unit.
The Tata family made the announcement of Ratan Tata’s death on Tata Group’s X handle. “We, his brothers, sisters and family, take solace and comfort in the outpouring of love and respect from all who admired him. While he is no longer with us in person, his legacy of humility, generosity, and purpose will continue to inspire future generations,” the statement read.
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