Ratan Tata said goodbye to the world, but while leaving, he established himself as an inspiration for the Tata Group and the common people. In a way, Ratan Tata is a role model for how to become successful. He proved in his life that if you have strong will and work hard then you will definitely be successful. Today, Ratan Tata plays a big role in the success of Tata Group’s automobile company Tata Motors. Actually, there is a story behind this which has been recorded in history. This story is related to Ford Motor, which once satirized Ratan Tata and made fun of him. Just this incident changed Ratan Tata in such a way that later he bought the world’s leading and luxury car company Jaguar Land Rover. After this it seemed as if Ford Motor had lost all its glory. This purchase was not just about business – it was also a kind of revenge that Ratan Tata took on Ford. Let us know what the story was and how Ratan Tata made Tata Motors the international automobile company it is today.
Ford Motor officials took a dig
In 1999, when Ratan Tata and his team presented their new car business to Ford, they faced rejection. Ford representatives questioned his expertise. Even wondered why they ventured into the passenger car division. At a meeting in Detroit, Ford executives arrogantly offered to buy Tata’s struggling car division, demoralizing them in the process. Actually, Ratan Tata was meeting Ford to sell his passenger car business. Ford told Tata that they would do him a favor by buying the car business. Ratan Tata did not like this and he decided not to sell the automobile business. After this Ratan Tata worked with determination on the car brand.
Jaguar Land Rover evolution
According to the Financial Express, Jaguar, founded in 1922 as the Swallow Sidecar Company, has emerged as a major player in sports saloons and cars. In 1989, Ford purchased Jaguar for $2.5 billion, capitalizing on its luxury appeal. Apart from this, another famous company Land Rover was also bought by Ford in the year 2000 for 2.7 billion dollars. However, Ford’s efforts to revitalize the brand were hampered by financial losses, stiff competition, and quality issues.
Tata’s victory
Ford paid $2.5 billion for Jaguar in 1989 and $2.7 billion for Land Rover in 2000, but it earned only $1.7 billion from sales of both the brands. Ford sold Jaguar primarily because of the losses it incurred at the time ($700 million). When the global economic recession struck in 2008, Ford faced serious financial troubles, pushing it to the brink of bankruptcy. Meanwhile, Ratan Tata seizes the opportunity to take his revenge. Tata Motors, now a significant player in the automotive industry, purchased Jaguar Land Rover from Ford for just Rs 2.3 billion. The cash transaction was a remarkable turnaround for Ratan Tata, who had been spurned by Ford nearly a decade earlier.
By 2009, just a year after the acquisition, Jaguar Land Rover began showing signs of profit. Despite the challenging global economic environment, Ratan Tata’s leadership and bold decisions revitalized the brands and resulted in a net profit of £55 million in 2009. This shows the effectiveness of Tata’s strategic intervention.