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not spared this criticism. How reliable can a $2,500 car be? Many<br />
Americans pay that much for quality bicycles and we want Land<br />
Rovers that will last. Will the American market support Land Rovers<br />
made in India? Could this be the beginning of the end of Land Rover<br />
as we have known? The sky is truly falling.<br />
Hold on to your feathers Chicken Little, there is good reason to<br />
believe the sky isn’t falling just yet: A very strong argument can be<br />
made that Tata plans to change little with Jaguar-Land Rover, despite<br />
the fact that everyone knows Jaguar could use some change as it has<br />
been loosing money for decades.<br />
One major reason not to promptly end production in the UK<br />
is the employees. UK workers have very strong labor contracts and<br />
relocating promptly would leave Tata paying significant severance<br />
packages. It makes no sense for Tata to move to India to take<br />
advantage of cheap labor while they are still paying the Brits they just<br />
put out of work. Cost of labor is not the only reason to keep<br />
production in the UK, moving Jaguar-Land Rover from the UK will<br />
disrupt brand loyalty.<br />
Tata knows that the value of Jaguar-Land Rover is based on<br />
prestige, which would be significantly devalued by Asian production.<br />
It makes little sense to purchase Jaguar-Land Rover and spend more<br />
money on new production facilities in order to lower production<br />
costs if the demand for those brands will be adversely affected. Tata<br />
would be exposed to a lot less risk if they were to simply aquire<br />
Jaguar-Land Rover and enjoy the profitability of Land Rover right<br />
where it is. When discussing what Tata plans to do with Land Rover, it<br />
is crucial to ask ‘Why did Tata purchased Jaguar-Land Rover?’ In<br />
order to answer that it helps to look at the Indian economy and the<br />
products Tata is currently making.<br />
India is the world’s second fastest growing economy after China.<br />
With a newly emerging middle class and a growing upper class the<br />
demand for luxury vehicles is growing rapidly in India. While Tata has<br />
been producing trucks for decades, its first venture into cars was only<br />
ten years ago and $2500 car has been their only new design since.<br />
Tata has yet to release the affordable luxury cars and SUVs that the<br />
Indian market is ready for and it is because they don’t have the<br />
technology.<br />
Some analysts are seeing Tata’s acquisition of Jaguar-Land Rover<br />
as a technology grab more than anything else. This is not a new role<br />
Land Rover LRX concept<br />
for Land Rover, as many claim BMW’s temporary ownership of Land<br />
Rover allowed them to gain the technology necessary to produce the<br />
BMW X5 SUV for less of an investment than developing it on their<br />
own. If indeed the Jaguar-Land Rover purchase was primarily a<br />
technology grab, then follows that Tata may not want to put much<br />
energy into changing things before reselling.<br />
So I have covered the worst-case scenario and the business as<br />
usual possibility, but is it possible that TATA’s purchase could be a<br />
good thing for us North American Land Rover aficionados? Consider<br />
this: What if TATA kept producing the luxury vehicles in Solihul and<br />
moved the Defender production to India?! If Range Rovers<br />
production remained in England the rich would still buy them,<br />
rappers would still “floss”‘ them lyrically (assuming they could still<br />
put big shiny spinning rims on them), and the status quo would<br />
remain. Indian production of the Defender could significantly lower<br />
costs as Defenders are a very labor intensive product. Of course the<br />
Indian manufactured Defender would also be prime for the US market<br />
which is clamoring for Defenders. Recently a relatively stock, low<br />
mileage NAS Defender 110 went for $80,000 at the Barrett-Jackson<br />
Auto Auction. TATA must certainly recognize the demand for<br />
Defenders in the USA. The question remains, do we really want an<br />
Indian-made Defender? Just a few hundred words ago I was saying<br />
the quality would be less than par. OF COURSE we want Indian made<br />
Defenders! Lets face it, Defender production quality wasn’t that great<br />
in England, lets give the Indians a try! For all we know the Indian<br />
production could be better. I just want to know, can we get some<br />
diesels too?<br />
Of course it is impossible to do anything more than hazard a<br />
guess at the future of Land Rover, so I am going to leave my official<br />
opinion out. I hope this article has allowed you to make up your own<br />
mind as to whether our beloved Land Rover is in for rocky times or<br />
the second coming of the Defender. It is certainly worth noting the<br />
irony of the situation: Jaguar and Land Rover, two brands that embody<br />
the posh British colonizing spirit, are now owned by a former colony.<br />
Who would have ever imagined the decisions of business men in India<br />
affecting the livelihood of factory workers of the UK?! This sounds like<br />
poetic justice to me.<br />
_______ ________<br />
Land Rover LRX concept<br />
Photo Curtesty of<br />
Land Rover<br />
Photo Curtesty of<br />
Land Rover<br />
Photo: Sean Roche Photo: Sean Roche Photo: Sean Roche<br />
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