Tata Motors says that they are now open to find a partner for Jaguar Land Rover but they are not willing to sell the British car maker.
“We’re not going to sell,” said Natarajan Chandrasekaran, chairman of Tata Sons -the holding company that owns Tata Motors- to Bloomberg. “Auto is a core business for us. From revenue terms, auto is our largest company.”
Tata Motors acquired Jaguar Land Rover from Ford in 2008 and turned it into a thriving car maker that enjoyed booming sales in regions like China and Russia. But the British car maker’s performance slowed down so significantly that it had to apply a 2.5 billion-pound ($3.2 billion) savings program and cut thousands of jobs worldwide.
Tata’s automotive business is facing mounting losses as well, facing a slump in its home market in India, as well as an economic slowdown in China. Add to that the uncertainty over Brexit and it’s no wonder that Tata is seeking for partners.
Chandrasekaran says that sales in China collapsed by 50 percent last year, with 2019 showing so far a minor improvement. He admitted that some of JLR’s issues were self-inflicted, like the vehicle quality and dealer network ones, saying that the whole industry is “going through difficult times”.
Jaguar Land Rover’s problems are bogging down Tata Group as a whole, as they had to write down their investment to the British manufacturer by $3.9 billion. Analysts at Bernstein describe JLR as “severely challenged”, adding that Tata should approach BMW as a buyer, as the German car maker is “awash with cash”. Tata has previously denied reports saying they are looking to sell a stake in JLR.
Chandrasekaran said that Tata is always open to partnerships but they don’t want to “just sell a stake and have no say”. He added: “We are not financial investors, Tata Group, we run companies. I’m not a Blackstone, I’m not a KKR.”
Tata’s target is to stabilize Jaguar Land Rover and put a stop on its losses by 2021. “Once we do that, then people will believe what I’m saying: I’m not running away”, Chandrasekaran added.