How Ratan Tata turned humiliation into success with JLR acquisition

THE STORY of Tata Group’s acquisition of Jaguar Land Rover (JLR) began with a meeting that left Ratan Tata deeply humiliated.

In 1998, Ratan Tata had launched the Tata Indica, India’s first diesel hatchback, which faced slow sales soon after its debut. With the business struggling, Tata Motors began exploring the option of selling its passenger car division within a year of launching Indica.

Ford Motors appeared to be an ideal buyer, and a meeting was set up at Tata’s Bombay House headquarters in 1999. Ford officials showed interest in buying the business.

Ratan Tata and his team then travelled to Detroit to meet Ford’s chairman, Bill Ford. The three-hour meeting, however, did not go well. According to someone who was present, the American executives were condescending, with Ford officials saying, “You do not know anything, why did you start the passenger car division at all?” They added that buying Tata’s car business would be a favour. The deal was called off.

Following the meeting, Ratan Tata and his team immediately flew back to India. During the flight to New York, Ratan Tata reportedly spoke very little, reflecting on the experience.

Instead of giving up, the incident strengthened Tata’s resolve to keep the passenger car division. His persistence led to a major success for Tata Motors.

In 2008, nine years after the failed Ford meeting, Tata Motors acquired Jaguar and Land Rover from Ford. The £1.75 billion all-cash deal took place during the global recession when Ford was struggling financially. At the time, Ford’s chairman Bill Ford expressed his gratitude to Tata, saying, "You are doing us a big favour by buying JLR," according to Pravin Kadle, a member of Tata’s team.

Since the acquisition, Tata has successfully turned around the British brands. Jaguar and Land Rover are now significant players in the global car market, and JLR remains a crucial part of Tata Motors' revenue today.

(With inputs from PTI)